Sponsor Statement for Senate Bill 306

"Tax Deductions for Custodial Parents"

This legislation keeps a parent who is in arrears of child support from unfairly claiming an exemption for a child they are not supporting.

Currently many custodial parents are being unfairly denied legitimate tax deductions because of a prior agreement in the child support order.

Senate Bill 306 enables a custodial parent to claim their child as a tax deduction if the parent paying support is in arrears for more than four months. Four months is an existing standard for revocation of licenses used by the State Board of Licensing and is defined in AS 25.27.244q(6). To facilitate the process of changing the recipient of the exemption, the court shall require, at the issuance of a support order, the payer to submit signed copies of IRS form 8332, waiving the tax exemption. These documents, signed for all tax years, will be held in the court file until such a time, if it occurs, when the payer is in arrears. This legislation also requires the Child Support Enforcement Agency provide the payee with a document certifying that the payer was indeed in arrears under AS 25.27.244q(6).

This legislation only applies to future support orders and cannot be retroactive.

DD/ljh