Some of the financial issues implicated by child custody arrangements and court orders are (1) child support payments; (2) payment for health insurance; and (3) the ability to claim the child or children as dependents for tax purposes. The Internal Revenue Service (IRS) rules dictate that the parent with whom the child spent the most nights during the tax year has the right to claim the child as a dependent. And if the child spends an equal number of nights with each parent during the tax year, the parent with the higher adjusted gross income (AGI) has the right to claim the child as a dependent. Sometimes the child custody court will order the parents to alternate years of claiming the child as a dependent.

In Connecticut, financial considerations related to child custody include child support payments, healthcare costs, and tax implications. Child support is determined by state guidelines that consider both parents' income, the child's needs, and the custody arrangement. The non-custodial parent typically pays support to the custodial parent. Regarding health insurance, the court may order either or both parents to provide coverage for the child. As for tax purposes, the IRS rules state that the custodial parent, defined as the one with whom the child spent the most nights during the year, is generally entitled to claim the child as a dependent. If the child's time is split evenly, the parent with the higher AGI may claim the dependency exemption. However, Connecticut courts can order parents to alternate the years they claim the child on their taxes, which should be reflected in the custody agreement or court order. It's important for parents to adhere to these IRS rules and any specific court orders regarding tax exemptions to avoid potential legal issues.