The custodial parent is entitled to claim the dependency exemption on their taxes unless he/she permits its use to the non-custodial parent. Whichever parent houses the child for the most nights through the year is considered the custodial parent, regardless of the divorce decree terms.
Whichever parent houses the child for the most nights through the year is considered the custodial parent, regardless of the divorce decree terms.
In order to claim exemption, the non-custodial parent must have the custodial parent complete and sign IRS Form 8332 (Release of Claim to Exemption for Child of Divorce or Divorce Parents). The divorce agreement or court order is not a substitute for IRS Form 8332, but the order could require the custodial parent to fill out the form.
The custodial parent can unilaterally revoke the release of a child exemption, even if the release was made prior to 2009. The parent claiming a dependency exemption on the child/children is the only parent eligible for the following tax benefits:
- Dependent Exemption Deduction
- Child Tax Credit
- Child and Dependent Care Credit
- Education Credit or Education Expense Deductions
- Earned Income Credit
- Head of Household Filing Status
All non-custodial parents who plan to take a dependency exemption should obtain IRS Form 8332 for 2009 and forward tax years. A divorce agreement or court order cannot be substituted for annually obtaining the form from the custodial parent.
In the case of any future similar settlement agreement, Form 8332 needs to be completed. This is an important step because it can be very difficult to get ex-spouses to sign off on papers at a later date.