Divorced or Separated Parents: Claiming Children As Dependents

Divorced or Separated Parents: Determination of Dependency Exemption

IMPORTANT TAX LAW CHANGE: Exemptions were suspended by the Tax Cuts and Jobs Act of 2017. You can’t claim any exemptions on your taxes for any tax years between 2018 and 2025.  However, various tax credits may be available for your dependents under this 2017 tax act.  As a result, the below discussion is still relevant in the determination of the availability of  certain tax credits such as the child tax credit, the additional child tax credit, other dependent credit, or the earned income tax credit that are tied into the definition of dependent.

Generally, children of divorced or separated parents are the dependents of the parent who has primary custody of the child during the year. However in certain cases a child may be treated as a dependent of the noncustodial parent.

Here are some of the rules concerning cases where a noncustodial parent can claim a child as a dependent.

Criteria for A Child Being Treated As a Qualifying Child or Qualifying Relative of the Noncustodial Parent

A child may be treated as a qualifying child or relative of the noncustodial parent if all of the following are met:

• The parents are divorced, legally separated, separated under a written separation agreement, or lived apart during the last six months of the calendar year;
• One or both parents provide more than half of the child’s total support for the calendar year (determined without regard to any multiple support agreement;
• One or both parents have custody of the child for more than half the calendar year; and
• The custodial parent makes a written declaration that he or she will no claim the exemption and the non-custodial parent attaches the declaration to his or her return for each and every year the exemption is claimed.

Custodial Parent Defined

The custodial parent is the parent with whom the child resides for the greater number of nights during the calendar year.

Temporary absences count toward the parent the child would have resided with for the night (for example, nights on vacation, sleepovers, etc.)

If the child resides with each parent an equal number of nights during the year, then the parent with the highest adjusted gross income is the custodial parent.

Written Declaration: Form 8332 or Similar Statement

Form 8332 or similar statement must be used by the custodial parent to make a written declaration to release a dependency exemption to the noncustodial parent. The noncustodial parent must attach the signed Form 8332 or similar statement to his or her return to claim the exemption for the child.

Divorce Decree Does Not Qualify As Written Declaration

A divorce decree does not qualify for a written declaration after July 2, 2008 under Treasury Regulation 1.152-4(e). The exception here is that for divorce decrees executed on or before July 2, 2008, if the pages of this decree constitute a statement substantially similar to Form 8332, the noncustodial parent can continue to use such decree.

Bottom Line: A state court order or divorce decree will not apply to allocate the dependency exemption between divorced or separated parents. The rules discussed above are the sole means for determining which parent may claim the exemption.

Declaration Must State Release Is Unconditional

The written declaration must state that the release must be unconditional. So the release can not be conditioned on the noncustodial parent meeting some obligation such a the payment of child support or alimony.

Release Must Specify Year or Years

The release must specify the year or years for which it is effective and must name the noncustodial parent claiming the exemption. If the release specifies that it applies to all future years, then it is effective the first tax year after the year it was executed.

Revocation Of Release

The custodial parent may revoke the release for future years by providing a written notice of the revocation to the noncustodial parent A copy of the revocation must be attached to the custodial parent’s return for any year he or she claims the exemption as a result of the revocation.

Noncustodial Parent Can Also Claim the Child Tax Credit But Not For Other Purposes or Other Credits

If all of the above requirements are met, the noncustodial parent may only claim the child as a qualifying child for purposes of the dependency exemption and the Child Tax Credit.

The noncustodial parent cannot claim the child as a qualifying child for purposes of

• Head of household filing status
• Dependent Care Credit
• Exclusion of dependent care benefits
• Earned Income Credit
• Health Care Coverage Tax Credit

The above is merely an overview of the tax rules in this area. Readers should consult with a tax attorney or tax accountant to get a definitive answer to their own particular situation.