Pennsylvania Family Law and Divorce
Lisa Marie Vari & Associates, P.C.

Basics of Federal Income Taxation related to PA Family Law

Often, obtaining tax returns (usually for the past three years) is an important part of a Pennsylvania divorce case, especially where a claim for alimony or support is involved. This is because a Federal Income Tax provides reliable income information for each party and is utilized by family court judges in a divorce or support matter.

An issue that arises with filing tax returns involves how to file when the parties are separated but not yet divorced. The issue becomes whether or not the parties should file jointly or separately. If the parties agree to file jointly, then they must decide what to do with the tax refund when it is received. Typically, a Pennsylvania family law attorney will advise his/her client to speak to a CPA regarding filing taxes before the divorce decree is entered to ensure that they are filing their taxes in the most beneficial way to them.

Pennsylvania family law attorneys typically memorialize their client's choice with filing status in writing - either through Consent Orders of Court or sometimes in Child Support Orders. This is done not only to document how the parties are filing their taxes, but also who is receiving the tax refund and which party is claiming the deduction for the parties' children. This is often a contested issue in custody cases, and is important to have in writing so that the parents know exactly how their taxes should be filed. Attorneys will commonly include a provision in a PA Consent Order of Court that the parties will alternate claiming a deduction for the children based on even/odd years.

What are Federal Income Tax Exemptions?

Every person filing taxes gets a personal exemption - and the amount of this personal exemption in 2012 was $3,800.00. Taxpayers can also claim exemptions for dependents - which include children and elderly living with the taxpayer. If there is a custody order in place awarding one parent with primary custody, then that parent will get to claim the exemption for that child or children on their Federal Income Tax return. If the parties are awarded shared custody (50/50), then the parent with the higher adjusted gross income will get to take the exemption for the child(ren).

How is alimony and child support handled for Federal Income Tax purposes?

The person receiving alimony should report this as income on their Federal tax return. The person paying, or the payor, is able to take a deduction for the amount of the alimony on their Federal income tax return. Child support, on the other hand, is not considered taxable income to the receiving party, nor is it deductible for the paying party.

Have questions about how your taxes and your Pennsylvania family law case intersect? Contact our office today!

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