J-S71036-15 

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37 

C.M.W. IN THE SUPERIOR COURT OF

PENNSYLVANIA 

 Appellant 

v. 

M.J.S. 

 Appellee No. 861 WDA 2015 

Appeal from the Order Entered May 1, 2015 

In the Court of Common Pleas of Forest County 

Domestic Relations at No(s): 00001-2008 

BEFORE: FORD ELLIOTT, P.J.E., SHOGAN, J., and OTT, J. 

MEMORANDUM BY OTT, J.: FILED DECEMBER 16, 2015 

 C.M.W. (“Mother”) appeals the order entered May 1, 2015, in the 

Forest County Court of Common Pleas, dismissing her exceptions to the 

March 4, 2015, recommendation of the Domestic Relations Hearing Officer 

(“DRHO”), and affirming the DRHO’s recommendation. Relevant to this 

appeal, the DRHO found a material and substantial change in circumstances 

warranting an upward modification of the child support payments of M.J.S. 

(“Father”), but declined to disturb the parties’ prior agreement that awarded 

Father the right to claim the federal tax child dependency exemption for the 

year 2014 and forward. On appeal, Mother argues the trial court’s award of 

the dependency exemption to Father was an abuse of discretion. For the 

reasons that follow, we affirm. 
J-S71036-15 

- 2 - 

 Mother and Father, who were never married, had a daughter (“Child”) 

born in February of 2005. Mother filed a complaint for child support in 

January of 2008.1 After conducting a hearing, the DRHO filed a 

recommendation that Father pay Mother $271.00 per month in child 

support, retroactive to Child’s birth. On April 1, 2008, the trial court entered 

the recommendation as a final order of court. 

 On August 1, 2014, Mother filed a petition for modification of support, 

contending there had been no review of the parties’ financial circumstances 

since the entry of the original order in April 2008, and the income of the 

parties had changed. Although a hearing before the DRHO was scheduled 

for October 2, 2014, on that date, the parties engaged in “informal 

settlement negotiations” which ultimately led to a “comprehensive 

agreement.” Recommendation, 10/2/2014, at 1. Pursuant to the 

agreement, the parties stipulated, inter alia: (1) Father’s support obligation 

would be $394.14 per month from August 1, 2014, through December 31, 

2014, and beginning January 1, 2015, increase to $453.68 per month; and 

(2) Father would be awarded the federal tax child dependency exemption for 

the year 2014 and “future tax years pending further order of court.” Id. at 

1-2. The agreement was entered as a final order of court on November 12, 

2014. 

____________________________________________ 

1

 From our review of the record, it appears that Mother has always had 

primary physical custody of Child. 
J-S71036-15 

- 3 - 

 One month later, on December 15, 2014, Mother filed a petition for 

modification, asserting a material and substantial change in circumstances. 

See Pa.R.C.P. 1910.19(a). Specifically, Mother claimed the award of the 

dependency exemption to Father did not “maximize the total income 

available to the parties[,]” and, in fact, “substantially reduce[d] income 

available” to Mother. Petition for Modification of an Existing Support Order, 

12/15/2014. She also averred Father was receiving overtime compensation. 

The parties appeared for an evidentiary hearing before the DRHO on 

February 5, 2015. The trial court summarized the evidence presented at 

that hearing as follows: 

 [Mother] and [Father] entered into an agreement 

regarding child support on October 2, 2014. Both parties had 

the benefit of counsel when they negotiated that agreement. 

The DRHO did not guide the negotiations. The agreement 

increased child support payments to [Mother] and allowed 

[Father] to claim the Dependency Tax Exemption. Days after 

the agreement, [Mother’s] husband telephoned his accountant, 

Greg Rhodes, with misgivings regarding the tax implications of 

the agreement. On October 6, 2014, Mr. Rhodes sent [Mother’s] 

husband a letter regarding his inquiry into the Dependency Tax 

Exemption. In early December, 2014, [Father] received a pay 

raise. [Mother’s] income also increased around the same time 

for her position as Cheerleading Coach. On December 15, 2014, 

[Mother] filed a Petition to Modify. 

 [Mother] files her [tax returns] jointly with her husband. 

[Mother] earned a total of $699.77 in 2014 because she feels 

she does not need to work. Her husband earned $47,212.23. 

[Mother’s] husband also holds the sole ownership interest in four 

limited liability companies; however, only two appear on the 

draft tax returns. [Mother] is fully aware of the four limited 

liability companies and their inner workings. Mr. Rhodes, an 

accountant, prepared the taxes for [Mother] and her husband for 

the past decade. Mr. Rhodes prepared two versions for the 2014 
J-S71036-15 

- 4 - 

year to illustrate the effect of claiming the Dependency Tax 

Exemption. Mr. Rhodes stated that he was only aware of two 

out of the four limited liability companies. Mr. Rhodes’ 

calculations suggest that the Dependency Tax Exemption had a 

$1,740 impact on [Mother] and her husband’s taxes. 

[Father] also provided draft tax returns. [Father] did not 

employ an accountant to prepare them. [Father’s] calculations 

suggest that the Dependency Tax Exemption has a $1,290 

impact on [Father’s] taxes. 

Trial Court Opinion, 7/16/2015, at 1-2. Father also testified that, in 

exchange for the right to claim the tax exemption, he agreed to pay more in 

child support beginning in 2015. N.T., 2/5/2015, at 82. 

 Following the hearing, the DRHO filed a recommendation proposing an 

increase in Father’s child support payments beginning January 1, 2015, from 

$453.68 per month to $516.30 per month. DRHO Recommendation, 

2/5/2015, at 1. The DRHO also recommended Father retain the right to 

claim the dependency exemption in 2014 and in future years pending further 

order of the court. Id. Mother filed timely exceptions to the DRHO’s 

recommendation, and the trial court held argument on May 1, 2015. That 

same day, the court dismissed Mother’s exceptions and affirmed the 

recommendation of the DRHO. Mother filed a timely motion for 

reconsideration on May 11, 2015, which the trial court promptly denied. 

This timely appeal followed.2

____________________________________________ 

2

 On June 2, 2015, the trial court ordered Mother to file a concise statement 

of errors complained of on appeal pursuant to Pa.R.A.P. 1925(b). Mother 

complied with the court’s directive and filed a concise statement on June 19, 

2015. 
J-S71036-15 

- 5 - 

 Mother’s arguments on appeal challenge the trial court’s award of the 

federal tax child dependency exemption to Father, the non-custodial parent. 

We review a trial court’s award of child support for an abuse of discretion. 

May v. May, 837 A.2d 566, 568 (Pa. Super. 2003). 

 As a general rule, under the Federal Tax Code, “the custodial parent is 

entitled to the [child] dependency exemptions.” Id. at 568, citing 26 U.S.C. 

§ 152(e)(1). However, the Code was amended in 1984 to provide three 

exceptions to the general rule, one of which is when the custodial parent 

“signs a written declaration that she will not take the exemption[.]” Id.

(citations omitted). As this Court explained in Miller v. Miller, 744 A.2d 

778 (Pa. Super. 1999), the changes to the Tax Code that allowed for this 

exception demonstrated “Congress’ surpassing indifference to how the 

exemption is allocated so long as the [Internal Revenue Service] doesn’t 

have to do the allocating.” Id. at 784 (citation omitted). 

Accordingly, Pennsylvania’s support guidelines permit the trial court to 

award the child dependency exemption to the non-custodial parent under 

certain circumstances. Pertinent to this case, Pennsylvania Rule of Civil 

Procedure 1910.16-2(f) provides: 

(f) Dependency Tax Exemption. In order to maximize the 

total income available to the parties and children, the court may, 

as justice and fairness require, award the federal child 

dependency tax exemption to the non-custodial parent, or to 

either parent in cases of equally shared custody, and order the 

other party to execute the waiver required by the Internal 

Revenue Code, 26 U.S.C.A. § 152(e). The tax consequences 

resulting from an award of the child dependency exemption must 
J-S71036-15 

- 6 - 

be considered in calculating each party's income available for 

support. 

Pa.R.C.P. 1910.16-2(f). 

 Mother first contends the trial court abused its discretion in awarding 

the dependency exemption to Father because it relied solely on the parties’ 

prior agreement, and disregarded the fact she demonstrated a material and 

substantial change in the parties’ financial circumstances. Mother points to 

the evidence she presented that Father received a pay increase in December 

2014, two quarterly bonuses in 2014, and six hours of overtime in January 

2015, all of which he failed to report to her.3 See Mother’s Brief at 15. 

Further, she emphasizes the DRHO agreed there was a “material and 

substance change in circumstances which took place after the existing 

support obligation was entered,” as is evident from its recommendation of 

an increase in Father’s support obligation. See DRHO Recommendation, 

2/5/2015, at 7-8. However, Mother claims the DRHO, as well as the trial 

court, abused its discretion when it determined “it would be inequitable to 

award the 2014 tax exemption to [Mother] simply because she decided after 

the fact that she had made an undesirable bargain[.]” Id. at 9. See also

Trial Court Opinion, 7/16/2015, at 4. She argues that once she met “the 

threshold burden of proving [] a material and substantial change in 

____________________________________________ 

3

 We note Father testified he reported his pay increase to Domestic 

Relations. N.T., 2/5/2015, at 79. 
J-S71036-15 

- 7 - 

circumstances[,]” the fact that “the parties entered into an agreement is of 

no consequence.” Mother’s Brief at 18. 

 We find Mother has misinterpreted both the recommendation of the 

DRHO and the ruling of the trial court. The DRHO determined Mother 

presented evidence of a “material and substantial change in circumstances,” 

based on Father’s pay raise in early December 2014, which necessitated an 

increase in his monthly support payments. See DRHO Recommendation, 

2/5/2015, at 7-8. However, the DRHO further found the “year-end raise” 

did not “materially change[] the facts as they were known to the parties on 

10/02/14 with respect to the 2014 tax exemption.” Id. at 9 (emphasis 

supplied). Indeed, Father received a $1.00 per hour raise in early December 

of that year. 

 Moreover, with regard to the tax exemption in future years, the DRHO 

found “the total income available to the parties and the child will be 

maximized if [Father] is permitted to claim [Child] as a tax exemption.” Id.

at 10. In arriving at that conclusion, the DRHO recalculated the potential 

tax savings of the parties using Mother’s earning capacity, as opposed to her 

actual earnings, which was what her accountant utilized when drafting the 

tax forms presented at the hearing. See id. at 9-10. The trial court agreed 

with the DRHO’s recommendation, further noting that Mother’s counsel 

agreed during argument that there was no change in the parties’ 

circumstances concerning the tax deduction. See N.T., 5/1/2015, at 5. 

The court also emphasized Mother’s testimony that she “works very few 
J-S71036-15 

- 8 - 

hours because she does not need the income,” and expressed its concern 

that Mother and her husband were “not forthcoming” with their accountant 

regarding two of the LLC companies in her husband’s name. Trial Court 

Opinion, 7/9/2015, at 4. 

 Based on our review of the testimony from the February 5, 2015, 

hearing, the May 1, 2015, arguments, the DRHO’s recommendation, and 

trial court’s opinion, we find no abuse of discretion. On October 2, 2014, 

Mother and Father decided to forego a support hearing, and enter stipulated 

facts on the record. Father testified that, as part of their agreement, he 

agreed to pay an increased monthly support amount, in exchange for the 

ability to claim Child as a federal tax exemption. N.T., 2/5/2015, at 82. 

Both the DRHO and the trial court determined there was no change in the 

parties’ circumstances with regard to the tax exemption between the entry 

of the agreement, on October 4, 2014, and the DRHO hearing on February 

5, 2015. We agree. 

 Next, Mother argues the trial court abused its discretion when it 

considered her “earning capacity, as opposed to actual earnings,” in 

calculating her tax consequences if Father claimed the dependency 

exemption. Mother’s Brief at 18. While acknowledging “an earning capacity 

can be assigned for support calculations,” Mother contends “earning 

capacities are not used in preparing and filing personal income tax returns 

and therefore a consideration of tax consequences must be based on ... 

actual wages, not draft tax returns using earning capacities.” Id. at 19. 
J-S71036-15 

- 9 - 

She also argues the court erred in affirming the DRHO’s recommendation 

when it “estimated [Father’s earned income tax credit] where [Father’s] 

draft returns do not reflect the same information.” Id. 

The DRHO determined that “for support purposes[,] [Mother] should 

be assigned a full-time earning capacity[.]”4 DRHO Recommendation, 

2/5/2015, at 7. Therefore, in determining the tax consequences of awarding 

the dependency exemption to Father, the DRHO calculated the potential 

savings using Mother’s earning capacity. Rule 1910.16-2(f) does not 

prohibit the calculation of tax consequences based on earning potential, and 

Mother has cited no case law to the contrary. Accordingly, we find no abuse 

of discretion on the part of the DRHO in doing so. 

With regard to the DRHO’s estimation of Father’s tax savings including 

the earned income tax credit,5 Mother cites no authority prohibiting such a 

consideration. Indeed, Father testified he did not include the credit in his 

draft tax returns because he “wasn’t sure” he would qualify for the credit 

____________________________________________ 

4

 In affirming the recommendation, the trial court emphasized Mother’s 

testimony that she “works very few hours because she does not need the 

income.” Trial Court Opinion, 7/9/2015, at 4, citing N.T., 2/5/2015, at 62 

(“I got this job out of leisure. ... I don’t really have to work. I prefer to be 

home for my children, to care for them.”). Mother also acknowledged that 

all of her children are now in school. N.T., 2/5/2015, at 62. 

5

 The earned income tax credit “is a benefit for working people who have low 

to moderate income ... [which] reduces the amount of tax you owe and may 

also give you a refund.” https://www.irs.gov/Credits-& -

Deductions/Individuals/Earned-Income-Tax-Credit. 
J-S71036-15 

- 10 - 

and “wanted to speak with somebody before” he included it. N.T., 

2/5/2015, at 81. Moreover, while it appears the DRHO considered the 

additional tax savings Father would receive should he qualify for the earned 

income tax credit, it did not base its final recommendation solely on this 

potential credit. Accordingly, we will not disturb the trial court’s ruling. 

In her final issue, Mother contends the trial court abused its discretion 

when it determined that it would be inequitable to award her the tax 

exemption, and would “diminish [Father’s] incentive to continue child 

support payments[.]” Mother’s Brief at 20. Specifically, Mother asserts the 

trial court misconstrued testimony during the modification hearing, and 

failed to consider the primary purpose of the tax credit is to “maximize 

income available for child support.” Id. at 21, citing May, supra. While 

Mother recognizes an allocation may be conditioned upon another purpose, 

such as timely child support payments, she asserts that no such incentive 

was placed on Father in the present case. See id. at 21-22. 

First, Mother asserts the trial court misconstrued testimony when it 

made the following findings in its opinion: (1) Father relied on the parties’ 

October 2015 agreement “to spend more for the benefit of the child, such as 

clothing[;]” (2) Mother “[w]hen questioned regarding whether circumstances 

changed regarding the Dependency Tax Exemption, ... conceded that no 

change occurred[;]” and (3) Mother and her husband “were not forthcoming 

with their own accountant ... because they did not disclose information 

regarding two LLC’s.” Mother’s Brief at 22-23, citing Trial Court Opinion, 
J-S71036-15 

- 11 - 

7/9/2015, at 4. Our review of the record reveals no error on the part of the 

trial court. 

During the modification hearing, Father testified he agreed to pay 

more in child support in exchange for claiming Child as a dependent on his 

federal taxes. N.T., 2/5/2015, at 82. He stated: 

And I continue to get other things, you know, for my daughter 

anyway besides the child support. So I figured if I could get it 

[the exemption] back and, you know, get her some things with 

it, then why not. And we had agreed to that anyway. 

Id. He further explained that, in addition to providing child support to 

Mother, he buys Child clothes that he sends home with her, and has added 

money to her lunch account at school. Id. at 83-84. Therefore, we agree 

with the trial court’s finding that Father relied on the parties’ agreement “to 

spend more for the benefit of the child, such as clothing.” Trial Court 

Opinion, 7/9/2015, at 4. 

 Next, with regard to Mother’s purported concession that no change in 

circumstances had occurred with respect to the tax exemption, the trial 

court was referring to a statement made by Mother’s attorney at the May 1, 

2015, argument on her exceptions. After the court questioned whether 

circumstances surrounding the dependency exemption had changed since 

the parties’ agreement a few months earlier, Mother’s attorney made the 

following comments: 

Okay. So, that, [the parties’ tax status,] your Honor, did not 

change. What our argument is, is that a child support order may 

be modified if there is a substantial change in circumstances. 
J-S71036-15 

- 12 - 

 And, this case, there was a substantial change in 

circumstances. Both parties had changes in wages, in earnings. 

And so, therefore, because there was a material and substantial 

change, our argument would be or I guess the defense argument 

is that you should just look at the fact there was no change with 

regard to the tax exemption. 

 But, what I would submit is that we should, that the Court 

shouldn’t piecemeal each of the issues .... 

 Once you hit that threshold of substantial change in 

circumstances, one of the tools or one of the factors that the 

Court can use is the dependency exemption. 

N.T., 5/1/2015, at 5-6. A fair reading of counsel’s comments supports the 

trial court’s finding. While Mother argued the court should have 

reconsidered the tax exemption issue in light of the change in the parties’ 

respective incomes, her counsel conceded there had been no change to the 

parties’ tax status since the agreement. 

 Lastly, concerning the trial court’s statement that Mother and her 

husband were not “forthcoming” with their own accountant,6 we again find 

the court’s comment was supported by the evidence. Rhodes testified that 

he was not aware of two LLC companies, registered to Mother’s husband, 

that were formed in February of 2014. N.T., 2/5/2015, at 24-25. He also 

acknowledged, however, that the companies would not have to be included 

on the tax return if there were no “transactions that would affect the 

numbers on the tax returns.” Id. at 33-34. To that end, Mother testified 

that neither of the two LLC’s “performs any business[,]” but rather, they 

____________________________________________ 

6

 Trial Court Opinion, 7/9/2015, at 4. 
J-S71036-15 

- 13 - 

were both “shell” corporations, created by her husband “to purchase the 

next business.” Id. at 45-47. Based on this testimony, we cannot conclude 

the court misinterpreted the testimony when it found Mother and her 

husband were not “forthcoming” with their accountant. 

 Mother also asserts, in her final issue, the trial court abused its 

discretion when it found the tax exemption provided an incentive to Father 

to make timely support payments. She argues no such specific incentive 

was included in the parties’ agreement. 

However, as this Court recognized in May, supra: 

Though we said that the “primary purpose” of allocating the 

dependency tax exemption was to maximize income available for 

child support, our choice of language indicates that there were 

other purposes. Another purpose, as identified by the trial court, 

on the facts of this case, is to provide an incentive for timely 

payment of child support which, quite obviously, promotes the 

best interests of the children who are the subjects of the support 

order. Moreover, providing this exemption to Father, while 

giving the incentive identified by the trial court, also tends to 

increase or “maximize” the income he has to satisfy his support 

obligation. 

Mindful of our standard of review we find no abuse of 

discretion in the trial court's determination that the incentive 

value outweighed the monetary savings in allocating the child 

dependency tax exemption to father. 

May, supra, 837 A.2d at 570. The same is true here. There is no indication 

in the May decision that the parties explicitly agreed that the father’s award 

of the tax exemption was dependent upon his timely payment of child 

support. Nevertheless, the trial court in May, as here, recognized the 

inherent value of the exemption to the party who received it. Moreover, 
J-S71036-15 

- 14 - 

contrary to Mother’s protestations, the DRHO did consider the tax 

consequences of the decision. See DRHO Recommendation, 2/5/2015, at 9-

10. See also Trial Court Opinion, 7/9/2015, at 4 (stating “[t]he DRHO 

based his calculations on earning capacity rather than actual earnings.”). 

The fact that the DRHO’s calculations were dissimilar to Mother’s is not 

grounds for relief. 

 Therefore, because we conclude the trial court did not abuse its 

discretion in denying Mother’s exceptions, and affirming the DRHO’s 

recommendation, we affirm the order on appeal. 

 Order affirmed. 

Judgment Entered. 

Joseph D. Seletyn, Esq. 

Prothonotary 

Date: 12/16/2015 

 
J-S71036-15 

- 15 -