Tax-tics: Claiming Without Custody

How a Non-Custodial Parent Can Claim A Child as a Dependent for Tax Purposes

Usually, the custodial parent claims dependent children and takes the child tax credit. This is practical since the children are receiving the majority of their care from the custodial parent. But the law under certain circumstances allows non-custodial parents to take the child tax credit.*

The IRS requires that the following be met for a non-custodial parent to take the child tax credit:

  1. The child must receive over one-half of his or her support over the year from his or her parents [Note that the child can’t be receiving over 50% support from elsewhere, e.g. grandparents, aunts, uncles, etc.]
  2. The parents must be:
    1. divorced or legally separated and have a divorce decree or separation maintenance
    2. separated under a written separation agreement, or
    3. living apart for the last 6 months at all times, whether or not they were married.
  3. The child is in custody of one or both parents for more than half of the year [Again, note that the parents, either one or both, must have custody for over half the year.]
  4. The IRS must receive Form 8332 (or “a statement conforming to the substance of Form 8332”), and the non-custodial parent must attach the form, or equivalent, on his or her tax return. Form 8332 requires explicitly:
    1. The names of the children
    2. The years for which the custodial parent releases the claims to the non-custodial parent
    3. The signature of the custodial parent
    4. The date of the custodial parent’s signature
    5. The name of the non-custodial parent claiming the exemption
    6. The Social Security numbers for the custodial and non-custodial parents.

The IRS very closely adheres to these requirements since they are so clearly defined in the statute. In a recent Tax Court Memo from 2010**, the court disallowed a father from claiming his children as dependents even though it was part of his divorce decree because he failed to get the signature of his ex-wife, the custodial parent. It was harsh medicine, but the court said, “[A] decree that was not signed by the custodial parent is not sufficient.”

Following the requirements carefully, a non-custodial parent can receive the child tax credit. If you are in a similar situation and are seeking counsel and advice, call my office.

Fred Antenberg is a Family Law Attorney in Columbia, Maryland who handles Divorce and family law matters in Columbia, Howard County, Maryland and surrounding counties. CONTACT Fred for your Free Consultation at 410-730-4404.