6.20 Tax Deductions

Federal and state tax dependency deductions are frequently just “handed out” to the non-domiciliary parent (typically the child support obligor). However, the disposition of these deductions is governed by La. R.S. 9:315.18, and you should raise this issue if giving the dependency deduction to the non-domiciliary parent is detrimental to your client. This part of the child support law creates much litigation, so care should be made to ensure each parent has the rights to which they are entitled.1

Under 9:315.18(A), the domiciliary parent is the default claimant. A non-domiciliary parent has the right to request the ability to take the deduction only if the non-domiciliary parent’s obligation exceeds 50% of the total obligation.2  However, it is not automatic. There must be a contradictory motion filed, findings that the non-domiciliary parent is not in arrears, and findings that the right to claim the child would substantially benefit the non-domiciliary parent without significantly harming the domiciliary parent.

Further, the court is now mandated (after January 1, 2021) to specify the years in which each parent is entitled to claim the child and to require the domiciliary party to sign necessary documentation.3  If the deduction is awarded to the non-domiciliary parent, the domiciliary parent will need to sign IRS Form 8332, relinquishing the exemption. If it is not signed by the domiciliary parent, there is nothing that the IRS will do.

The party seeking to have the dependent tax deduction taken away from a domiciliary parent has the burden of proving that no child support arrearages are owed and that it would substantially benefit the non-domiciliary party without significantly harming the domiciliary party.4  Incorrectly, but as a practical matter, the onus is usually placed on the domiciliary parent. So be ready to argue either significant harm to your client or that the obligor is in arrears.

The Child Tax Credit, which is an offset against tax liability, goes with the dependency exemption and cannot be separately assigned by the court.5  The Household and Dependent Care Credit, Head of Household status, and the Earned Income Credit are all defined and determined by the Internal Revenue Code. They follow the domiciliary parent and may not be reallocated by the court.

• 1For additional discussion, see Section 9.4 and Section 10.9 of this manual’s chapter on tax law.
• 2La. R.S. 9:315.18(B)(1).
• 3La. R.S. 9:315.18(B)(2).
• 4State v. Landry, 2007-1013 (La. App. 3 Cir. 1/30/08), 975 So. 2d 157
• 5See I.R.C. § 24(c)(1)(A).