- The Tax Reform Act of 1986, also known as Public Law#99-514, was signed into law by President Ronald Reagan on October 22, 1986.
- Bill information
- This was the clear first major divergence in federal law between the taxation of custodial vs. non-custodial parents.
- Key points of the legislation regarding child custody included:
1. Starting in 1988, there was a notable difference in the standard deductions between head of household and single filers. This meant that custodial parents paid less taxes than non-custodial parents.
2. The earned income tax credit was dramatically increased, providing a greater windfall for custodial parents.