Know the rules before claiming a dependent

If you are a divorced or separated parent, the rules for determining which one of you can claim the children as dependents is confusing at best. A few years ago, the IRS created rules that provided a uniform definition of a child for purposes of claiming certain tax benefits such as the head of household filing status, the child tax credit, the dependent care credit, arid the earned income tax credit.


When parents divorce, the decision of who will claim the children is generally outlined in the divorce decree. In many cases, the judge will award to the noncustodial parent the dependency exemption for the children because he or she is paying child support while the children reside with the custodial parent. This arrangement tends to even out the tax burden somewhat by allowing the noncustodial parent a deduction for the child's personal exemption since there is no deduction for child support payments.

This works great when the parents abide by the judge's ruling. There are cases where they do not. This is when the trouble starts. Why? Because the IRS doesn't care what the divorce decree states. The IRS makes the assumption that the custodial parent is entitled to the dependency deduction-period. The only exception to this assumption is when the custodial parent releases the claim by signing Form 8332, Release of Claim to Exemption for Child of Divorced or Separated Parents. Prior to 2009, the noncustodial parent could attach oages from a divorce decree or similar statement which must contain the same information-the name of the child(ren), the tax year to which it applies, and the name and social security number of the parent releasing the claim. Starting in 2009, the noncustodial parent can no longer attach the pages of the divorce decree that states he or she is entitled to the dependency exemption and satisfy the waiver requirement. Form 8332 must be used.

In the event the custodial parent refuses to sign the waiver and claims the children, the noncustodial parent cannot claim the same children. If both parents claim the same children, the IRS will send a notice stating that there has been an error. Each parent's refund will be adjusted to reflect the denial of the dependency exemptions until the matter is settled. If the custodial parent still refuses to release the claim to the other parent, the only recourse is to go back to the judge that issued the original divorce decree and have the ruling enforced. Until that is done, the IRS will award the dependency exemptions to the custodial parent provided that parent can prove the children lived in his or her home for more than half of the year.

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Saturday, 25th May 2019
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Tax Tips Personal

  • Divorced?

    Know the rules before claiming a dependent

    If you are a divorced or separated parent, the rules for determining which one of you can claim the children as dependents is confusing at best. A few years ago, the IRS created rules that provided a uniform definition of a child for purposes of claiming certain tax benefits such as the head of household filing status, the child tax credit, the dependent care credit, arid the earned income tax credit.

    Read more ...

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