Income Tax Considerations for Single Parents

With income tax season officially in full swing, single parents notice that the IRS lets them claim various child deductions, exemptions and credits. NHPSC has compiled a list of some of the most important things that single parents should consider when completing their income taxes.

Income Tax Considerations for Single Parents

income taxTypically, the parent who has custody of the child will get to claim the child on the tax return. This can be confusing given split custody agreements. Only one parent will be able to claim the child. Where the child spends most of the time can also be a factor of child deductions, exemptions and credits. In cases such as these, speak with your ex-partner and come up with an agreement. The Internal Revenue Services, also known as the IRS, looks at where the child stays for more than half the year. A lot of times this is not the parent with primary custody.

One of the biggest income tax exemption is the dependent exemption. The IRS allows for a dependent exemption for qualifying children up to the age of nineteen. This exemption is extended to twenty-four years of age if the child is a full-time student. If the child is permanently disabled then there is no age limit. It is important to note that you cannot claim this exemption if the child provided more than half of his/her own support throughout the tax year.

There is also a child tax credit that many parents are able to claim. This credit can decrease your taxes but can be used for any U.S. citizen dependents that are under the age of seventeen. Please speak to your tax professional about child qualifications and income limits since these can change in different tax years.

Another income tax credit that single parents can claim is child care expenses that they pay that allows them to work. This credit can be applied to children twelve years and younger and can max out at a certain limit. Only the custodial parent can claim this credit, even if the other parent used the dependent deduction.

Filing income tax can be confusing. The rules and regulations change with each tax year. This is why it is important to keep proper records and to seek out professional help when you are ready to complete your return. Continue to check NHPSC’s blog for more parenting articles.