One of the questions that is most asked in a child support or custody scenario is “Who gets to claim the children on income taxes?” A Mom and Dad can agree on who claims the deduction, or the Court can decide the issue. However, the bottom line is that federal tax law determines who may actually claim the child or children even if a court order directs who gets the exemption.
The IRS has addressed when the noncustodial parent can claim the children in Publication 504, which discusses children of divorced or separated parents, or parents who live apart.
For tax purposes, the child is already the “qualifying child” of the parent that has custody. That means that the custodial parent can always claim the child. We’ll assume for this article that the Mom is the custodial parent, and the Dad is visiting. The Mom always has the right to claim the child, because she is the custodial parent. So, under what circumstances can the Dad claim the child? Well, let’s see!
The I.R.S. will grant Dad the right to claim the children if four conditions are met:
- The parents don’t live together, either because (a) they are divorced or separated under a divorce or separate maintenance decree, (b) they are separated under a written separation agreement, or (c) they lived apart at all times during the last 6 months of the year.
- The child or children received over half of his support for the year from Mom and Dad.
- The child or children are in the custody of one or both parents for more than half the year.
- Mom signs a document, most likely an IRS Form 8332, saying that she won’t claim the child that year and the Dad attaches this document to his taxes.*
As you can expect, number 4 above is the most important requirement. Even though the Court may award the deduction, the I.R.S may not honor the court order if the above requirements are not met. Hence, it is always important for the noncustodial parent or his attorney to include in the settlement and court order some language requiring Mom to sign Form 8332 to release the exemption.
*There are special rules for a divorce decree signed prior to 1984 that are not discussed here.