Tax Filing Status & Dependent Exemptions in California Child Support Cases
How a party's tax filing status and dependent exemptions factor into Guideline Child Support Calculations in California.
Tax Filing Status in California Child Support CasesFiling Status: You have the following options for your filing status in Child support cases: 1) Single, 2) Head of Household, 3) Married Filing Separately (same spouse or new spouse) & 4) Married Filing Jointly (same spouse or new spouse).
a) Single: Tax filers that claim "Single" receive the least tax savings and therefore their total income for which to pay support is reduced compared to the other tax filings. However, if you are the recipient of child support and you are filing "Single", then you will have a greater need to pay support as you will not have this tax savings.
b) Head of Household: Tax filers that claim "Head of Household" typically have the child(ren) at least 50.01 % of the time to qualify for this tax filing status. By filing Head of Household, you receive an additional tax savings over those who file as "Single". As such, if you are the payor of child support, you will have more money available to which you can pay child support based on the higher tax savings. If you are the recipient of child support and you claim "Head of Household", you will have a decreased need for child support based on your tax savings.
c) Married Filing Separately: Married Filing Separately either with your new spouse or the other parent is the equivalent to "Single" as far as the tax savings is concerned which either increases your need for support or decreases your ability to pay support depending on whether you are the payor or the payee.
d) Married Filing Jointly: Tax filers who claim "Married Filing Jointly" with another spouse will need to provide their new spouse income. Although new spouse income will not be added to the calculation of support as to one party having more money available to pay support, the new spouse's income may effectively change your tax liability/bracket which would either decrease your ability to pay child support if you are the payor or increase your need for child support if you are the payee of child support.
Dependent Exemptions in California Child Support CasesDependent Exemptions: Dependent Exemptions refer to the number of children that you claim on your taxes. In addition to dependent exemptions, other noteworthy exemptions include a new spouse or other eligible person (parent/grandparent, nephew etc.) that you routinely claim as a dependent on your tax returns. Obviously the more exemptions that you qualify for on your taxes, the lower your tax liability will be. How this lowered tax liability impacts your ability or need to pay child support depends on whether you are the Obligor (higher earner/payor of support) or the Obligee (lower earner/recipient of support). For the Obligor, the greater number of exemptions you have, the greater your ability is to pay child support as more of your income is being kept by you as opposed to being paid to the IRS and the Franchise Tax Board. For the Obligee, the greater number of exemptions that you have, the less of a need you have for child support as you are able to keep more of your income as opposed to being paid to these same agencies. Although the dependent exemption is typically awarded to the custodial parent (parent with larger custodial time), it may be awarded to the non-custodial parent if the parties both agree. If that is done, the custodial parent will need to complete IRS form 8332 to release the dependent exemption and to ensure that the IRS is clear as to who will be claiming the child on their taxes.