Tax Exemptions and Unpaid Child Support

Many court Orders will provide that a parent who is paying child support must be current on child support in order to be eligible to claim tax exemption(s).  This time of year is when that issue often comes to the forefront.

It is common that a parent who is ordered to pay child support in Iowa or Illinois will also be awarded a tax exemption.  What form that tax exemption award takes will vary case by case.  For example, if a parent who is paying child support has two children, they may be awarded one of the two tax exemptions.  Or, if there is one child, the tax exemption may be alternated on a year-to-year basis.

There are also situations where tax exemptions are not shared or alternated by court Order.  That is common in two scenarios.  The first, and likely most common, is that one party does not have an attorney when the court Order is being entered and as a result doesn’t know to seek that exemption, and in turn missed out on it.  The other likely situation is one where a party has no income and as such has no benefit for the tax exemption, such as a person whose only income is disability.

In the common situation where a person paying child support is entitled to claim a dependency tax exemption on the condition that they are current on child support, it is important to determine whether or not they are current and therefore entitled to the exemption.  A person who claims and exemption when they are not entitled can face many consequences, to include a rule to show cause that can result in significant expenses or even jail time.

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Each case and each court order are unique, and it is important to remember that the specifics of the court Order, rather than the general trends discussed here, are what control.  A person who is unsure about whether they or their ex is entitled to a tax exemption should contact an attorney, as it is far better to address these issues properly than to do the wrong thing and have legal consequences later.