Dependency Exemptions

From the Kansas City Star - tax tips Kansas City Star . Also see my other blogs under divorce and taxes.

Q My divorce degree lets my ex-husband claim one of our two children on his tax return even though they both live with me. Since my ex-husband is behind on paying child support, can I claim both children?

A. Being behind on child support payments does not typically affect the right to claim a dependency exemption for a child.

With divorced taxpayers, the general rule is that the parent with custody of the child for the greater part of the year receives the dependency exemption as long as the child does not provide more than one-half of his or her own support.

If a child spends an equal amount of time with each parent, the parent with the higher adjusted gross income will receive the dependency exemption.

Of course, there are exceptions to this general rule.

One such exemption is with pre-1985 divorce decrees or separation agreements between parents, which grants the noncustodial parent the dependency exemption. In such a case, the noncustodial parent receiving the dependency exemption must provide at least $600 of support for the child during the year.

The other exception to the general rule is when the custodial parent releases the right to claim the dependency exemption for a child to the noncustodial parent. This transfer is granted by the custodial parent signing a written waiver. Generally, IRS Form 8332 is used for these purposes and must be attached to the noncustodial parent’s tax return for each year a dependency exemption for the child is claimed. The divorce decree can also be used if it addresses specific issues required by the IRS.

Additionally, for the noncustodial parent to claim the child on his or her tax return, the child must receive over half of his or her support for the year from one or both of the parents. Public assistance payments, such as Temporary Assistance for Needy Families, are not considered support provided by the parents. Also, the child must have been in the custody of one or both of the parents for more than half the year.

IRS Form 8332 or a similar statement can be used to release the claim of exemption for a child for the current year, specific future years or all future years. Your divorce decree, if specifically worded, can serve as an equivalent statement in lieu of Form 8332, and your ex-husband can use it to claim the dependency exemption. To serve as your release of the exemption for one of your children, your divorce decree or agreement must include all of the following information:

•The noncustodial parent can claim the child as a dependent without regard to any condition (such as payment of support).

•The other parent will not claim the child as a dependent.

•The years for which the claim is released.