What Effect Will Divorce Have on My Taxes in Texas?

 Posted on September 14, 2026 in Divorce

Divorce changes more than your living situation. Divorce can change how you file taxes, who can claim the children, and how some property is taxed.

A Tarrant County, TX divorce lawyer can help you understand how tax issues may affect your 2026 divorce.

How Does Dividing Property in a Texas Divorce Affect Your Taxes?

Dividing property in a divorce usually does not create an immediate federal tax bill. Under federal law 26 U.S.C. Section 1041, transfers between spouses generally do not create a taxable gain or loss. The same is generally true for transfers between former spouses if the transfer is related to the divorce.

For example, if a couple bought a home for $250,000 and it is now worth $400,000, the spouse who keeps it generally does not get a new $400,000 tax basis. If the home is sold later, the earlier gain can affect how much tax is owed. This means two assets that are worth the same amount today can have very different tax costs later.  

It’s wise to review these tax implications for various assets before property division is finalized. For a main home, a person who meets IRS requirements can generally exclude up to $250,000 of gain from federal taxes. In general, this requires owning and living in the home for at least two of the five years before the sale, although special rules can apply after divorce.

Retirement accounts need special handling during divorce. A 401(k) or pension is often divided using a court order called a QDRO. This can allow a former spouse to receive or roll over their share without the usual 10 percent early-withdrawal penalty. Taxes can still apply if the money is taken out instead of rolled over. IRAs follow different rules and do not use a QDRO.

Are Spousal Maintenance Payments Taxable in Texas?

Under federal tax law, spousal maintenance paid under a divorce or separation agreement signed in 2019 or later is not deductible for the person paying it. It is also not taxable income for the person receiving it. Agreements signed in 2018 or earlier generally follow the old tax rules. If an older agreement is later changed, the newer rule applies only if the change specifically says that it does.

Child support is separate from spousal maintenance. Child support is not deductible by the person paying it or taxable to the person receiving it.

Who Gets to Claim the Children on Their Taxes After a Texas Divorce?

In most cases, the parent the child lives with for more nights during the year is the parent who can claim the child. That parent can let the other parent claim the child for a certain year by signing IRS Form 8332.

Form 8332 can let the other parent claim some tax benefits, such as the child tax credit. It does not give that parent every tax benefit related to the child. Some benefits, such as head of household status, the earned income tax credit, and the child and dependent care credit, usually stay with the parent who meets the IRS rules for them.

Only one parent can claim the same child as a dependent in the same year. Parents sometimes agree to take turns claiming the child or to split which children they claim. For divorce agreements made after 2008, putting this plan in the divorce decree is usually not enough for federal taxes. The custodial parent generally must also sign Form 8332 or another statement accepted by the IRS.

What Filing Status Should You Use During and After a Texas Divorce?

Your filing status depends on your marital status on the last day of the calendar year. Based on your marital status on December 31, you have several options:

• Single: Available if your divorce is final by December 31.
• Head of household: May be available if you are unmarried or considered unmarried, paid more than half the cost of keeping up your home, and a qualifying child lived with you for more than half the year.
• Married filing jointly: Available if you are still legally married at the end of the year. This often results in a lower combined tax bill, but both spouses can be responsible for taxes, interest, and penalties on the joint return.
• Married filing separately: Available if you are still legally married. Because Texas is a community property state, special rules can apply to how income and deductions are divided between separate returns.

Filing jointly often results in a lower combined tax bill. However, both spouses can be held responsible for the tax, interest, and penalties due on a joint return. Filing separately can limit that shared responsibility, but special community property rules apply in Texas.

Call a Dallas, TX Divorce Lawyer Today

Tax issues can affect whether a property division is fair over time. Our Tarrant County, TX family law attorney can help you negotiate a division that’s actually fair to you long-term.

Attorney Michelle Poblenz is a former prosecutor for the Dallas County District Attorney’s Office. She brings more than 25 years of legal experience to every case and gives each one her personal attention.

Call the Law Office of Michelle Poblenz at 469-845-3031 to schedule your initial consultation.