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Divorce and child tax credits

This past July, approximately 36 million families began receiving enhanced child tax credit advance payments. It was welcome financial relief for many as a pandemic drags on, fueled by the COVID-19 delta variant.

How the child tax credit (CTC) could affect custody and support arrangements

Parents, particularly those who are not married, will want to think carefully about how to handle the windfall of the CTC. It means a monthly $300 per child under age six and a monthly $250 per child ages six through 17. Even though the parents may be divorced or otherwise split up, the entire amount of the credit can only go to one parent, usually the one with whom the children live most of the time. Parents do have the option of alternating every year or agreeing to one parent solely claiming the credit. Parents can also opt out of the CTC if it would not be beneficial in terms of taxes.

In some cases, a modification of child custody or support may be needed to account for the CTC. If parents would like to modify a custody or support arrangement in light of the CTC funds, it is important to seek legal guidance in these matters as soon as possible. Likewise, parents currently going through a divorce should speak with their attorneys about the effect the CTC may have on decisions related to child support and parenting time.

Child care costs are a common aspect of parenting and child support agreements. To learn more about these matters, please see our overview of modifying child custody and parenting time, as well as our overview of child support enforcement and modification.