Who claims the child as a dependent for tax purposes?
In general, the custodial parent claims the child for tax purposes. If the court does not make any orders about the tax deduction, then the custodial parent automatically claims the child as a dependent for tax purposes. The IRS income tax rules say that the parent having custody for the greater portion of the calendar year receives the deduction.
A court, can, however, order that the non-custodial parent be allowed to claim the child for tax purposes. The court will order the custodial parent to sign the proper IRS forms to allow the non-custodial parent to claim the child for tax purposes. The custodial parent signs IRS Form 8332 [PDF file], Release of Claim to Exemption for Child of Divorced or Separated Parents, and provides it to the noncustodial parent who attaches it to his or her return. Often, the court will allow the non-custodial parent to claim the child for tax purposes only if that parent is current on his or her child support payments.
The court may consider several factors when deciding whether to grant the non-custodial parent the tax deduction, including:
- Whether the non-custodial parent will be paying the majority of the support for the child.
- The incomes of the parties.
- The tax consequences for each parent.
What if the parents have joint legal custody?
The parent with physical custody will claim the child on his or her taxes unless the court has said otherwise. Often, with joint custody arrangements, the court will order that the parents take turns claiming the child, with one parent claiming the child one year, the other parent the next year. Sometimes if there is more than one child, the court will divide the children between the parents for deduction purposes. It is important to look at the paperwork from the divorce or custody action to see what has been determined. If you have gotten a divorce or "dissolution," the tax information is usually covered in the document that is called the "Separation Agreement." If you can't find the information in your papers, you may want to check with the attorney who represented you.
What if the custodial parent refuses to sign the IRS forms to allow the non-custodial parent to have the deduction?
The court could hold the custodial parent in contempt of court for refusing to follow a court order. The court could also lower the non-custodial parent's child support payment based upon the extra taxes the non-custodial parent would have to pay without the child deduction.
Reviewed August 2009