In 2008, the IRS amended Code Section 152(e), the section which addresses the subject of the child dependency exemptions for divorced or separated parents. The old rule and procedures have been changed dramatically.
Here is a summary of the dependency exemption requirements:
- The child must be your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them.
- The child must be (a) under age 19 at the end of the year, (b) under age 24 at the end of the year and a full-time student, or (c) any age if permanently and totally disabled.
- The child must have lived with you for more than half of the year.
- The child must not have provided more than half of his or her own support for the year.
If the child meets the rules to be a qualifying child of more than one person, you must be the person entitled to claim the child as a qualifying child. (To read the special test for a qualifying child of more than one person, click here.
In most cases, but not always, a child of divorced or separated parents will qualify as a dependent of the custodial parent. However, in a divorce or separation occurring after December 31, 2008, the noncustodial parent may be able to claim the exemption for the child if ALL of the following apply:
Are divorced or legally separated under a decree of divorce or separate maintenance,
Are separated under a written separation agreement, or
Lived apart at all times during the last 6 months of the year.
The child received over half of his or her support for the year from the parents.
The child is in the custody of one or both parents for more than half of the year.
The custodial parent signs Form 8332 (or a written declaration) that he or she will not claim the child as a dependent for the year, and the noncustodial parent attaches this written declaration to his or her return.
So the determination of who is the “custodial parent” for IRS purposes is determined by these tests and calculating whom the child has resided with the greater number of nights during the year, regardless of the terms of the divorce decree! Additionally, beginning in 2009, the custodial parent can unilaterally revoke the release of a child exemption for calendar years 2009 and beyond regardless of when the release was made. The parent claiming a dependency exemption is also entitled to benefit from a Child Tax Credit and any allowable Hope or Lifetime Learning Educational Tax Credits. To read more about the rules, click here to review IRS publication 504. If you want to print off Form 8332, click here.
In summary, parents divorced or separated in 2009 should keep track of the number of nights the child stayed in each home. Attaching pages from a divorce decree or separation agreement instead of Form 8332, as had been allowed in the past, won’t be acceptable. The noncustodial parent must attach Form 8332 or similar statement signed by the custodial parent. Plan ahead and document the necessary information; and if you are the noncustodial parent and you are claiming the tax exemption, don’t forget to attach the executed form 8332 with your return. Of course in order to fully understand all of the implications of the IRS code as they apply to your particular facts, I suggest that you consult an experienced accountant or tax attorney.
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Robert L. Mues
Robert Mues is the managing partner of Dayton, Ohio, law firm, Holzfaster, Cecil, McKnight & Mues, and has received the highest rating from the Martindale-Hubbell Peer Review for Ethical Standards and Legal Ability. Mr. Mues is also a founding member of the "International Academy of Attorneys for Divorce over 50" blog.