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 Ohio, as in other states, child custody arrangements and court orders can significantly impact financial responsibilities. Child support payments are determined based on state guidelines, which consider the income of both parents, the needs of the child, and the amount of time the child spends with each parent. Health insurance for the child is typically 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 generally allow the custodial parent—the one with whom the child spends the majority of nights—to claim the child as a dependent for tax purposes. If the child spends an equal number of nights with each parent, the IRS stipulates that the parent with the higher AGI should claim the child. However, Ohio courts may order parents to alternate claiming the child on their taxes, which can 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 claims to avoid potential legal issues.