There is conflicting authority on who gets to claim the children for tax purposes in a New Jersey Divorce, and that causes a lot of confusion. In this video, New Jersey divorce attorney Jordan Rickards simplifies the issue and explains the general rules.

What follows is a transcript of the above-video:

“Hi. I want to talk today about a topic that comes up in a lot of divorces involving children, in fact, almost all divorces involving children. And that is, who gets to claim the kids for tax purposes. And the reason for this is obvious: that those tax credits often are not insignificant, they can make a real difference in your income tax return. There’s a lot of confusion out there about who gets to claim the kids because, frankly, there’s conflicting authority about it.

Now, what happens is a lot of people will go onto Google because everybody’s a Google lawyer these days and they’ll Google the question and they’ll get something from the IRS. And what the IRS will tell you, and you would think that they would be the authority on this sort of thing, is that the parent who is with the child more is the one who gets to claim the kids for tax purposes. The parent who has more overnight parenting time, the parent of primary care, that’s the one who gets to claim all of the kids. And what they also tell you is in a 50-50 situation where both parents have an equal amount of parenting time, it’s actually the parent with the higher adjusted gross income who gets to claim children because that’s a parent who would actually benefit more from it.

So people Google that and they get the IRS website or whatever, and they think that’s the answer. And maybe that’s the answer in some states, but it’s not the answer in New Jersey. And it’s very strange that our laws actually override the IRS laws because we typically think of the federal government as being supreme. And in fact, in the United States Constitution there’s something called the Supremacy Clause, which says that when state laws are in conflict with federal laws, the federal laws control.

But here’s an example of when it doesn’t because New Jersey family courts are courts of equity and they always have the right to do what they think is fair. Now, I’ve told you before that, about 98% of cases settle and so it never even comes to a judicial decision. And in those settlements more often than not the parties just agree to share the tax credits. And so if you have one child, you’ll have one parent claim the tax credit in even years, the other parent will claim the tax credit in odd years. If you have two children, you guys will just each split claiming one child, one parent claims one, the other parent claims the other. And then when the older child is emancipated, you guys will alternate the child tax credit back and forth. That’s typically what happens when you settle it.

If it goes to a judicial determination, that’s also in all likelihood going to be what happens. Now, every case is different. And the court might find that one parent because of his or her income wouldn’t even benefit from the child tax credit, that’s possible also, in which case the court might give the other parent the right just to have the tax credit in those years where the one parent wouldn’t benefit from it. And maybe there’s some offset somewhere else. But the bottom line is just because the IRS says that the parent of primary care gets the child tax credit or credits in the case of multiple kids, doesn’t mean that’s the case in New Jersey law. New Jersey courts, remember, they’re not courts of law, they’re courts of equity and so the judges can always do what they think is fair. And from those judicial decisions, we’ve created sort of standards of settlement where when we are negotiating child custody and parenting time, we’re negotiating equitable distribution, we’re negotiating all those different things, it’s just kind of understood that where you have one child the parents are going to alternate the tax credits. And when you have two children, they’ll both each take a tax credit. And then when it becomes only one child they’ll alternate. And of course you can do that with however many children you want.

So, that’s the short version of who gets to claim the child tax credit. Don’t necessarily go by what the IRS says, understand that New Jersey family law is a bit different. If you have questions about this sort of thing, feel free to give me a call the number below or give me an email and I’ll be happy to speak with you. In the meantime guys, always good to see you. Take care of yourselves.”