One of the most common questions that arises after a divorce or separation is, “Can a noncustodial parent claim a child on their tax return?”

The stakes are high: claiming a dependent can translate into significant tax benefits, such as the Child Tax Credit or the Earned Income Tax Credit. Understanding how the Internal Revenue Service (IRS) rules intersect with family court orders is crucial for parents who need clarity on this issue.

This post will provide a comprehensive overview of the IRS regulations and explain how child custody arrangements typically affect which parent is entitled to claim a child as a dependent.

Custodial vs. Non-Custodial Parent

First, let’s define the two terms at play:

1. Custodial Parent: The parent with whom the child lives for the greater number of nights during the year. If the time is split exactly 50/50, there are additional tiebreaker rules (usually favoring the parent with the higher adjusted gross income).
2. Noncustodial Parent: The parent with whom the child does not reside the majority of the time.

The IRS places the power to claim the child squarely in the hands of the custodial parent by default. In other words, the custodial parent is generally the only one entitled to claim the child as a dependent.

When Can a Noncustodial Parent Claim the Child?

While the custodial parent has priority, there are situations in which a noncustodial parent can claim the child:

1. Written Release (IRS Form 8332): The most common scenario is when the custodial parent voluntarily signs a release using IRS Form 8332, or a similar statement that conforms to IRS requirements. By signing Form 8332, the custodial parent waives the right to claim the child for certain tax benefits—namely, the dependent exemption (when it applied in prior years) and the Child Tax Credit.
2. Court Order or Divorce Decree: Sometimes, divorce decrees or separation agreements include provisions stating that the noncustodial parent can claim the child in specific years (for example, alternating years or contingent on being current on child support). However, the IRS ultimately requires a properly executed Form 8332 regardless of what the decree says. A court order may obligate the custodial parent to sign Form 8332, but it does not replace the requirement of the form itself.
3. Other Rare Situations: In exceedingly rare cases (such as if the custodial parent does not file taxes at all, cannot be found, or other unique circumstances), a noncustodial parent might argue their case for claiming the child. These situations, however, can be complex and often require legal assistance to navigate.

IRS Criteria For Claiming a Child

To claim a child as a dependent, a parent must meet several criteria set out by the IRS:

1. Relationship: The child must be your son, daughter, stepchild, foster child, sibling (or stepsibling), or a descendant of any of these.
2. Age: The child must be under 19 at the end of the tax year, under 24 if a full-time student, or permanently and totally disabled.
3. Residency: The child must live with you for more than half the year (with some exceptions for temporary absences like school).
4. Support: The child must not provide more than half of their own support.
5. Joint Return: The child cannot file a joint return with another person, except in a situation where neither spouse is required to file, and they file solely to claim a refund.

When parents are divorced or separated, the “residency” factor usually determines who qualifies as the custodial parent. If the noncustodial parent wants to claim the child, the custodial parent must meet the form requirement as outlined above.

Common Misconceptions About Claiming Children On Your Taxes

1. “I pay child support, so I can claim the child.”
   Paying child support does not automatically grant the right to claim a child as a dependent for tax purposes. The IRS looks to physical custody, not financial support, as the deciding factor.
2. “My decree says I can claim the child, so I don’t need Form 8332.”
   Even if your court order states you can claim the child, the IRS will still require a signed Form 8332 from the custodial parent (or equivalent written statement). Without it, the IRS may reject your claim or may audit your return.
3. “We have 50/50 custody, so we can both claim the child.”
   Only one parent can claim a child in any given year, even if parenting time is split equally. If parents cannot agree on who claims the child, the IRS applies tiebreaker rules (often favoring the parent with the higher adjusted gross income). However, in practice, many 50/50 custody arrangements stipulate that parents alternate which tax years each gets to claim the child, and this typically requires executing Form 8332 for the alternating years.

Practical Tips For Handling Child Custody Related Tax Situations

1. Communicate Early: If you and your former partner want to arrange for the noncustodial parent to claim the child, discuss it prior to tax filing season to avoid disputes or the risk of both parents claiming the child.
2. Use Form 8332 Properly: Make sure the form is filled out accurately and signed by the custodial parent for the specific tax years in question.
3. Retain Documentation: Keep copies of Form 8332, court orders, and any relevant communication or documentation in case the IRS requests proof.
4. Review Child Support Orders and Decrees: Ensure that your agreement or decree is in alignment with IRS requirements. If not, consult an attorney or mediator to modify it if necessary.
5. Stay Current on Tax Law Changes: The tax code changes periodically. Keep in touch with a qualified tax professional or attorney to stay informed about any updates affecting dependency exemptions or child-related tax credits.

In most cases, the parent who has physical custody of a child for the majority of the year (the “custodial parent”) has the right to claim the child as a dependent. Nonetheless, the noncustodial parent can sometimes claim the child—but only if the custodial parent signs IRS Form 8332 (or an equivalent release) and relinquishes their claim.

If you are unsure about your right to claim a child or how to handle a situation where both parents want the tax benefits, consulting both a family law attorney and a tax professional is the wisest course. They can help you interpret your court order, navigate the IRS regulations, and avoid costly conflicts or audits.

If you need assistance with a divorce decree, modification, or any other family law matter, feel free to contact our office for a comprehensive consultation.