Facts: Juvenile Court ordered a Parenting Plan for Mother and Father that established Father’s child support obligation. After a hearing, the trial court determined the federal income tax exemption for Child would be rotated yearly between the parents. Mother appealed.

On Appeal: The Court of Appeals reversed and remanded.

Setting child support is a discretionary matter with the trial court. Likewise, the decision regarding the allocation of exemptions for minor children is discretionary and should rest on facts of the particular case. An appellate court must consider (1) whether the trial court’s decision has sufficient evidentiary foundation; (2) whether the trial court correctly identified and properly applied the appropriate legal principles; and (3) whether the decision is within the range of acceptable alternatives.

Section 1240-02-04-.03(6)(b)2(ii) of the Tennessee Child Support Guidelines provides, in pertinent part:

(b) Child Support Schedule Assumptions.
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2. Taxation Assumptions.
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(ii) The alternate residential parent will file as a single wage earner claiming one withholding allowance, and the primary residential parent claims the tax exemptions for the child.

Mother argued this assumption resulted in a directive to the trial court to award the tax exemption to her. The Court rejected this argument, noting the provision simply describes the methodology used to compute spouses’ respective net incomes. The cited provision is titled “Assumptions and Methodology Used in the Income Shares Model,” subsection (b) is titled “Child Support Schedule Assumptions,” and subsection (b)(2) is titled “Taxation Assumptions.” The rule relied upon by Wife is not really a rule at all, the Court held, but a mathematical “assumption” regarding an unrelated matter. Accordingly, the Court ruled the trial court did not abuse its discretion by failing to award the tax exemption to Mother solely on the basis of the cited section from the Tennessee Child Support Guidelines.

The holding that [Tennessee Child Support Guidelines section] 1240-02-04-.03(6)(b)2(ii) does not mandate that Mother be awarded the exemption, however, does not end the inquiry regarding its applicability to this case. The allocation of the tax exemption is one aspect of an order setting support and is properly considered in that regard. The assumption that the federal tax exemption for the child has been claimed by the primary residential parent is incorporated into the Child Support Schedule. The allocation of the tax exemption is also an element of the “financial and tax equities” which the trial court is to consider. In determining whether the trial court abused its discretion in awarding the exemption, therefore, it is necessary to consider the other components of the child support award.

Because the trial court failed to make the factual findings necessary to determine Father’s child support obligation pursuant to the Guidelines, the Court said it was unable to determine whether rotating the exemption is equitable or whether the trial court abused its discretion in rotating the exemption.

Accordingly, the trial court’s ruling was reversed and the matter remanded for reconsideration of the award of the federal income tax exemption as part of the determination of Father’s child support obligation.

Crews v. Staggs (Tennessee Court of Appeals, Middle Section, May 31, 2011).

Information provided by K.O. Herston: Knoxville, Tennessee Matrimonial, Divorce and Family Law Attorney.