Divorced or legally separated parents may wonder which of them is eligible to claim the tax credits and deductions available for having a dependent child. This is particularly an issue in situations involving joint custody. Generally, only the parent having custody can claim the available tax advantages.
Definition of a Parent
The Internal Revenue Service (IRS) only considers a taxpayer who is related to a dependent child by birth or adoption to be their parent. An individual not listed on the child's birth certificate is not a parent. Therefore, if they are not listed on the child's birth certificate, one member of an unmarried couple with a child may not be considered a parent. In this case, the unlisted parent is ineligible for any dependent tax credits or deductions.
If the parents have a court document, such as a divorce decree, the parameters it contains for claiming a child govern the parents' actions. Therefore, the IRS definition of custody and other regulations only apply in the absence of a legal document.
The parent entitled to claim a dependent child on their tax return is generally the parent who has custody the majority of the time. The IRS defines "custody" according to the number of evenings the child spends with a parent. The parent at whose residence the child spends the majority of their nights, regardless of the parent's presence, is the one with custody. Therefore, a child who spends 190 evenings at his mother's house and 175 with his father would be in the custody of his mother.
The dates counted towards residency begin on the date of legal separation or divorce. For example, parents who divorced on November 1st would only consider the two month period in which they were legally divorced to determine which of them had custody.
A child who is absent, for example due to staying the night at a friend's house or being away at camp, is considered to have stayed with the parent who would have hosted them on that evening. For parents who work evenings, the IRS determines custody by the number of days the child spends with the parent.
The rule is different for parents who share time equally, such as the mother having 183 days and the father 182 days. In this case, the custodial parent is the one with the higher adjusted gross income.
Rights of the Custodial Parent
The custodial parent may claim the dependent exemption, child tax credit, dependent care credit, earned income tax credit and list themselves as a head of household on their tax return. Available credits and deductions cannot be split between the parents. However, parents may alternate the right to claim the child and any available credits or deductions.
Rights of the Non-Custodial Parent
Usually, the non-custodial parent may not claim the child or any dependent tax credits or deductions. The exception to this rule is when the custodial parent agrees to permit the custodial parent to claim them or when they are entitled to do so according to a court document, such as a divorce or separation decree.
For a non-custodial parent to claim the child, they must file Form 8332, titled "Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent," with their return. This form tells the IRS that the custodial parent permits the non-custodial parent to claim the child. Parents divorced between 1984 and 2009 may substitute copies of their divorce decree for this form. To do so, they must provide copies of the first page of the decree as well as the page the delegates the right to the non-custodial parent and the signature page.
Claiming Your Dependent Child
If the amount of time your child spends in your home entitles you to claim her on your tax return, you may do so without filing any additional documentation. Remember, however, that you must claim all of the available credits and cannot split them with your ex-spouse. If you are uncertain about whether you have custody of your child, seek professional advice.