Claiming Child on Tax Return Tax Deductions 1000px
By: Glenn Schanel, CPA
on August 6, 2018

Taxes after divorce can be confusing, especially when children are involved, and when the parents disagree about who gets to claim a child on their tax return.

According to the IRS, the parent that the child lives with more than half of the tax year, known as the custodial parent, is generally entitled to claim the child on their tax return and claim the following tax benefits:

  • Dependency Exemption (which does not exist under the new tax law but is scheduled to return in 2026).
  • Child tax credit
  • Dependent care credit
  • Earned income tax credit
  • Head of Household filing status if they’re not married.

However, many divorce decrees specify that the noncustodial parent is entitled to claim a child. In this situation, the custodial parent needs to explicitly waive their right to claim the child by giving the noncustodial parent a signed copy of Form 8332, which they attach to their tax return.

The following conditions must be true:

  • The parents are legally divorced or separated or have lived apart for all of the last six months of the year.
  • One or both of the parents provided at least 50% of the support for the child.
  • One or both of the parents had custody of the child for at least half the year.

A noncustodial parent who satisfies all of the requirements and attaches a signed Form 8332 to their return is entitled to the following tax benefits:

  • Dependency Exemption (which does not exist under the new tax law but is scheduled to return in 2026).
  • Child tax credit

The custodial parent will still be entitled to claim:

  • Dependent care credit
  • Earned income tax credit
  • Head of Household filing status if they’re not married.

In the event a parent claims a child even though they are not entitled to do so, recent IRS regulations provide the following guidance:

  • The parent who incorrectly claimed the child should:
    1. Complete and sign Form 8332 and give to the other parent.
    2. Prepare an amended tax return removing the child, and submit the return with a copy of the signed Form 8332 attached.
  • The parent who is entitled to claim the should:
  • Prepare a return (amended if necessary) claiming the child and submit the return with the signed Form 8332 attached.

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