Filing taxes is stressful and confusing at the best of times. When you are divorced, filing can be even more complicated. It is unavoidable that after your divorce, the filing process will look slightly different than usual. Navigating divorce and taxes can seem like a daunting task. In this article, we outline the basics of how to file taxes after you get divorced.
Determining Your Taxpayer Filing Status
Your marital status as of December 31st of the previous year will dictate what filing status you claim on your taxes. If you were in the process of finalizing your divorce but had not yet separated before the end of the year, you can still file a joint return or file as married filing separate. However, if you finalized and split up before December 31st, you cannot file jointly.
If you finalized your divorce before December 31st of last year and are considered unmarried, you might be able to file as the head of household if you meet the qualifications listed below. Additionally, if you divorced and married someone else by the end of the previous year, you and your new spouse can file a joint return.
Qualifications for head of household (must meet all requirements):
- Your divorce was finalized, or you were considered unmarried by December 31st of last year
- A qualifying person lived in your house for more than half of the year
- Your parent does not have to live with you to be a qualifying person
- You paid more than half of the upkeep expenses for your home
Qualifications for unmarried status (must meet all requirements):
- Filing a separate tax return
- Your spouse did not live in your home the last 6 months of the tax year
- Temporary absence IS considered living in your home
- Your child, stepchild, or eligible foster child lived in your home as their “main home” for more than half the year
- You can claim an exemption for the child, stepchild, or eligible foster child
- Even if you signed Form 8332 (see below), you must still meet this requirement.
Claiming Dependents After Divorce
Who can claim your child as a dependent on their taxes? This depends on if you or your ex-spouse are the custodial parent. A custodial parent is one with whom the child lives for a longer period during the previous year than the other parent. A noncustodial parent is the parent with whom the child lived for fewer days during the previous year. A noncustodial parent can claim a child as a dependent if the custodial parent signs a waiver stating they will not claim the child (see below). Even if your divorce decree specifically gives a noncustodial parent custody, the divorce tax law definition above will likely control.
You can include a child’s medical bills you continue to pay after the divorce in your medical expense deduction even if your ex-spouse has custody and claims the child as a dependent on their taxes.
A custodial parent can claim:
- child credit
- American Opportunity higher education credit or Lifetime learning higher education credit
- work-related expenses incurred for a child under 13 (even if your ex-spouse claims the child as a dependent)
A noncustodial parent can claim a dependent if:
- The custodial parent signs Form 8332 or a substantially similar statement
- The noncustodial parent attaches From 8332 or a substantially similar statement to their tax return
A noncustodial parent cannot claim:
- Head of household status
- Earned Income Credit (EIC)
- Child and dependent care credits
- Exclusion for dependent care assistance benefits
Note: child support is not considered income for the recipient, nor is it deductible by the payer.
Is Alimony Tax-Deductible?
If your divorce or separation agreement was finalized before January 1st, 2019, and contained an alimony payment, it IS deductible to the payer and taxable to the recipient. Conversely, if your divorce or separation agreement containing an alimony payment was finalized after December 31st, 2018, or finalized before 2019 but modified to repeal the alimony payment, it is NOT deductible by the payer, nor is it taxable to the recipient.
The IRS requirements for alimony are:
- Spouses do not file a joint return
- Payment is in cash
- Payment is required by the divorce or separation agreement
- Payment is made when spouses are not members of the same household
- No liability to make the payment after the death of the recipient
- Payment is not treated as child support or a property settlement
Need Legal Help?
If you are in need of legal help with a divorce, consider reaching out to Nicol Gersch Petterson for a free 30-minute consultation or by looking into our Hello Divorce packages! Find more information at https://CoLawTeam.com or call 970.670.0378. If you need more information about taxes and filing status, please consult a tax professional. We are happy to provide referrals to CPA’s and other tax advisors who have made a difference in our clients’ lives!
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