Rules regarding who can claim a child tax deduction can be found in IRS Publication 596. In general, you can only qualify to claim a child for a tax credit or dependency exemption if the child has lived with you for over half of the year.
However, sometimes in crafting child support orders, family law professionals and courts deliberately plan to give the noncustodial parent the dependency exemption and child tax credit. This is especially true if the support recipient has lower income and is in a lower tax bracket and the supporting parent is in a higher tax bracket. The party in the higher tax bracket may be able to make better use of the exemption and credit. Sometimes allowing that person to claim a child will enable us to order a higher amount of support because there is more disposable income available to pay support. It’s a win-win for everyone.
The IRS allows the noncustodial parent to claim a child tax deduction if each of the following requirements are met:
“1. The parents:
a. Are divorced or legally separated under a decree of divorce or separate
b. Are separated under a written separation agreement, or
c. Lived apart at all times during the last 6 months of 2012, whether or not they are
or were married.
2. The child received over half of his or her support for the year from the parents.
3. The child is in the custody of one or both parents for more than half of 2012.
4. Either of the following statements is true.
a. The custodial parent signs Form 8332 or a substantially similar statement that he
or she will not claim the child as a dependent for the year, and the noncustodial
parent attaches the form or statement to his or her return. If the divorce decree or
separation agreement went into effect after 1984 and before 2009, the
noncustodial parent may be able to attach certain pages from the decree or
agreement instead of Form 8332.
b. A pre-1985 decree of divorce or separate maintenance or written separation
agreement that applies to 2012 provides that the noncustodial parent can claim
the child as a dependent, and the noncustodial parent provides at least $600 for
support of the child during 2012.”
Remember, without a signed Form 8332 or equivalent, the noncustodial parent may not claim the child tax deduction.
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