Unlike other states, Arizona actually has a detailed formula that determines which parent should get the benefit of federal tax exemptions, as well as state tax exemptions, should the parents be unmarried and living in separate households. Exemptions involving dependent children can mean thousands of dollars in tax savings, so parents who are living separate should be familiar with our state’s detailed rules and ask their attorneys if they have questions.
Under the state’s Child Support Guidelines, parents are supposed to set up a five-year cycle for determining which parent should get what exemptions and under what terms. To the extent possible, exemptions are supposed to be divided according to how much income each parent makes. By way of example, if the mother of the children makes $80,000 a year and the father makes $20,000 a year, then the mother should get 80 percent of the tax exemptions.
The Guidelines give parents some discretion as to whether they wish to set this cycle up by alternating years, by each taking their fair share of the available exemptions each year or some combination of both approaches. So, to use the previous example, if a couple has 5 children, then the mother and father may decide to let the mother have the exemptions 4 out of the 5 years. Alternatively, they may decide for each year to let the mother claim 4 of the 5 children while the father claims 1 exemption annually.
It is important for Phoenix parents to remember that this formula assumes that the parent paying child support is current on payments. A court may elect to award all exemptions to the parent who is supposed to receive support, if the other parent is frequently behind in his or her child support obligation.