Tax Filing After Divorce: What Changes

From filing status to dependency claims, understand how divorce impacts your taxes and what deductions you can still claim.

Divorce fundamentally changes your tax filing situation. Your filing status, dependency claims, deduction amounts, and eligibility for credits all shift. Getting these right in the first filing year after divorce is critical to avoiding IRS issues and maximizing your tax benefits.

Your filing status depends on your marital status on December 31 of the tax year. If your divorce was finalized by that date, you file as Single or, if you have qualifying dependents, potentially as Head of Household. Head of Household provides more favorable tax brackets and a higher standard deduction than Single status, so qualifying for it can save significant money.

Alimony, child support, property division, and retirement account transfers all have specific tax implications. Alimony paid under agreements executed after 2018 is neither deductible by the payer nor taxable to the recipient. Child support is never taxable or deductible. Property transfers between spouses as part of a divorce settlement are generally tax-free, but understanding the cost basis of transferred assets is important for future tax planning.

Key Deductions & Credits

Head of Household Filing Status

$1,000 - $3,500

If you maintain a home for a qualifying child for more than half the year, you can file as Head of Household with a $22,500 standard deduction and wider tax brackets than Single.

Child Tax Credit

$2,000 - $6,000

The custodial parent typically claims the Child Tax Credit of $2,000 per child unless Form 8332 releases the claim to the noncustodial parent.

Legal Fee Deduction (Limited)

$200 - $1,000

Divorce attorney fees are generally not deductible. However, fees specifically for tax advice related to the divorce or for producing taxable alimony income may be deductible.

EITC Eligibility

$600 - $7,830

After divorce, your lower individual income may now qualify you for the Earned Income Tax Credit, especially if you file as Head of Household with dependents.

Forms You May Need

Form 1040 — U.S. Individual Income Tax Return

Form 8332 — Release/Revocation of Release of Claim to Exemption

Form 8822 — Change of Address

Form SS-5 — Application for a Social Security Card (name change)

Schedule 8812 — Credits for Qualifying Children and Other Dependents

Filing Tips

Determine your correct filing status based on your marital status on December 31. If your divorce was not finalized by that date, you must file as married.
Review your divorce decree for specific tax-related provisions about who claims children as dependents and how deductions are allocated.
If you qualify for Head of Household, use it. The higher standard deduction and wider brackets save money compared to Single filing.
Update your Form W-4 immediately after divorce to adjust withholding for your new single-income tax situation.
Keep records of the cost basis of all assets received in the divorce settlement, as you will need these when you eventually sell those assets.
If you received a QDRO distribution from your ex-spouse's retirement plan, understand how rollovers and withdrawals are taxed.

Common Mistakes to Avoid

Both ex-spouses claiming the same child as a dependent, which triggers an IRS notice and delays both refunds.
Filing as Single when you qualify for the more beneficial Head of Household status.
Assuming alimony is deductible under a post-2018 divorce agreement. Only agreements executed before 2019 that have not been modified allow the deduction.
Not adjusting withholding after the divorce is finalized, leading to a large tax bill or unnecessary overpayment.
Forgetting to account for the tax impact of selling the marital home or splitting retirement accounts.

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FAQ

Who claims the children as dependents after divorce?

The custodial parent, the one with whom the child lives for more than half the year, has the right to claim the child. The custodial parent can release this claim to the noncustodial parent by signing Form 8332. The divorce decree may specify this arrangement.

Is alimony still tax-deductible?

Only for divorce agreements executed before January 1, 2019, that have not been modified to adopt the new rules. Under agreements from 2019 onward, alimony is not deductible by the payer and not taxable to the recipient. Child support has never been deductible or taxable.

How do I qualify for Head of Household?

You must be unmarried on December 31, have paid more than half the cost of maintaining your home for the year, and have a qualifying dependent who lived with you for more than half the year. Head of Household provides a $22,500 standard deduction versus $15,000 for Single.

Is a property settlement taxable?

Property transferred between spouses as part of a divorce is generally not a taxable event. However, the receiving spouse takes the transferring spouse's cost basis, which means potential capital gains taxes when the property is eventually sold.