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 North Carolina, child custody arrangements and court orders often address several financial issues related to the care and support of children. First, child support payments are determined based on the state's child support guidelines, which consider both parents' incomes, the child's needs, and the amount of time the child spends with each parent. Second, payment for health insurance is typically required, and the court may order one or both parents to provide or maintain health insurance coverage for the child. Lastly, the ability to claim the child as a dependent for tax purposes is influenced by IRS rules. According to these rules, the parent with whom the child spent the most nights during the tax year is generally entitled to claim the child as a dependent. If the child spends an equal number of nights with each parent, the IRS stipulates that the parent with the higher adjusted gross income (AGI) has the right to claim the child. However, North Carolina courts can order parents to alternate the years they claim the child as a dependent, which should be reflected in the custody agreement or court order and may require the use of IRS Form 8332 to release the dependency exemption to the non-custodial parent.