Your federal filing status for the year turns on a single question: were you divorced on the last day of the year? If your decree of dissolution was entered by December 31, the IRS treats you as unmarried for the whole year. If not, you are married for the whole year, even if you separated in January. This article walks through what follows from that, using the IRS's own guide, Publication 504, Divorced or Separated Individuals. It is part of our Montana Divorce Guide.
A&M Law is a family law firm, not a tax firm. Use this as a map of the questions, and take the answers to a CPA or enrolled agent.
The December 31 Rule
Publication 504 states that the filing status you can choose "depends partly on your marital status on the last day of your tax year." You are unmarried for the whole year if you have "obtained a final decree of divorce or separate maintenance by the last day of your tax year," and state law determines whether you are divorced.
In Montana, a decree of dissolution is final when entered, subject to appeal (MCA § 40-4-108(1)). So the date on the decree is the date that matters. A petition that is filed but not finished by year-end leaves you married for that tax year.
| Your situation | How the IRS treats you | Filing status options |
|---|---|---|
| Final decree entered on or before December 31 | Unmarried for the whole year | Single, or head of household if you meet the tests |
| Still married on December 31, living together | Married for the whole year | Married filing jointly or married filing separately |
| Still married on December 31, spouse out of your home for the last 6 months, child living with you | May be "considered unmarried" | Head of household, if every test is met |
The IRS also closes an obvious loophole. If a couple divorces for the sole purpose of filing as unmarried and intends to remarry each other, and does so in the next tax year, they must file as married.
Whether finishing before or after the new year is better for your household is a question for a tax professional.
If You Are Still Married on December 31
A married couple can file jointly or separately. A joint return requires both of you to report all income, deductions, and credits on one return, and it comes with joint liability, discussed below. Publication 504 suggests figuring the tax both ways to see which gives the lower combined tax.
There is one exception for people who are separated but not yet divorced. You may be "considered unmarried" and able to file as head of household if you meet all of these tests:
- you file a separate return;
- you paid more than half the cost of keeping up your home for the year;
- your spouse did not live in your home during the last 6 months of the tax year;
- your home was the main home of your child, stepchild, or foster child for more than half the year; and
- you can claim the child as a dependent, or cannot only because the noncustodial parent can.
Head of Household After the Decree
Once you are divorced, head of household is available if you are unmarried on the last day of the year, you paid more than half the cost of keeping up a home for the year, and a qualifying person lived with you in the home for more than half the year. The costs that count include rent, mortgage interest, real estate taxes, home insurance, repairs, utilities, and food eaten in the home.
Only one parent can use the same child for this status. Publication 504 notes that a person cannot qualify more than one taxpayer for head of household for the year, and that a noncustodial parent cannot use a child for head of household merely because the custodial parent released the dependency claim.
Who Claims the Children
For tax purposes, the custodial parentis the parent with whom the child lived for the greater number of nights during the year. If the nights are equal, it is the parent with the higher adjusted gross income. Montana parenting plans do not use the word "custodial" this way, so do not assume the label in your plan answers the tax question. Count nights.
The custodial parent can release the claim to the other parent with Form 8332 or a similar written statement. For a decree or agreement that went into effect after 2008, the noncustodial parent cannot simply attach pages from the decree. The release also must be unconditional. Publication 504 gives the example that it must not depend on the noncustodial parent paying support.
So if your decree says the parents alternate years, the decree binds the two of you, but the IRS will look for the signed form. Releasing the claim does not move everything: Publication 504 notes that the child generally remains the custodial parent's qualifying child for head of household status. Our article on who claims the child on taxes goes deeper.
Support, Property, and Retirement Transfers
Child support payments are not deductible by the payer and are not taxable to the recipient. Maintenance, which the IRS calls alimony, is not deductible and not income when paid under an instrument executed after 2018. See maintenance and taxes.
Property transfers between spouses, or between former spouses when incident to the divorce, generally produce no taxable gain or loss, and the person who receives the property keeps the original basis (26 U.S.C. § 1041). That means two assets with the same value today can carry very different future tax bills. The same idea applies to the house, covered in transferring the house and refinancing.
Retirement money paid to a former spouse under a qualified domestic relations order is generally taxed to that former spouse, and an eligible distribution can be rolled over. See getting the QDRO done.
Withholding, Estimated Tax, and Old Joint Returns
When you become divorced or separated, you will usually need to give your employer a new Form W-4. A change in filing status changes the tax tables that apply to you, and a single paycheck withheld at a married rate can leave you short in April. If you made joint estimated tax payments during the year and then file separately, Publication 504 explains how the two of you can divide them.
The IRS also asks you to report changes. Use Form 8822 for a new address. If you change your name, notify the Social Security Administration so your return matches its records. If you have Marketplace health coverage with advance premium tax credits, report the change in marital status to the Marketplace.
Finally, joint returns from earlier years do not go away. Publication 504 is blunt: if you are divorced, you are jointly and individually responsible for any tax, interest, and penalties due on a joint return for a tax year ending before your divorce, and "this responsibility applies even if your divorce decree states that your former spouse will be responsible." The IRS has relief procedures for some spouses, requested on Form 8857. If an old return worries you, raise it with a tax professional before you settle, and see dividing debt in a divorce.
This page summarizes federal tax guidance in IRS Publication 504 (for use in preparing 2025 returns) and Montana law as of the 2025 Montana Code Annotated. It is not tax or legal advice about your specific case. Tax rules change every year.