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 Nevada, child custody arrangements and court orders can significantly impact financial responsibilities. Child support payments are determined based on the income of both parents and the needs of the child, with the non-custodial parent typically making payments to the custodial parent. Health insurance for the child is often required to be provided by one or both parents, and the cost may be factored into child support calculations. Regarding tax implications, the IRS rules state that the parent with whom the child spent the majority of nights during the tax year is entitled to claim the child as a dependent. If the child's time is split evenly, the parent with the higher adjusted gross income (AGI) may claim the dependency exemption. However, Nevada courts can order parents to alternate the years they claim the child as a dependent, which overrides the IRS rule. It's important for parents to adhere to the specific terms outlined in their custody agreement or court order to ensure compliance with both state and federal regulations.