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 Maryland, as in other states, child custody arrangements can have significant financial implications for both parents. Child support payments are determined based on state guidelines that consider the income of both parents, the number of children, and the custody arrangement. The non-custodial parent typically pays child support to the custodial parent to cover the child's living expenses. Health insurance for the child is usually required to be provided by one or both parents, and the cost may be factored into the child support calculation. Regarding tax implications, the IRS rules state that the parent with whom the child spent the most nights during the tax year is entitled to claim the child as a dependent. If the child spends an equal number of nights with each parent, the parent with the higher AGI is eligible to claim the child. However, Maryland courts can order parents to alternate the years they claim the child as a dependent, which overrides the IRS rule. It's important for parents to adhere to the specific terms of their custody order and consult with an attorney for guidance on how these financial issues apply to their situation.