Who Can Claim a Child on Taxes When Parents Are Separated?
For separated parents, IRS rules, not just custody, decide who claims a child. Learn how residency and documentation affect the dependency claim and other tax benefits.
For separated parents, IRS rules, not just custody, decide who claims a child. Learn how residency and documentation affect the dependency claim and other tax benefits.
When parents separate or divorce, determining who can claim a dependent child on a tax return is a common issue. The Internal Revenue Service (IRS) has established specific regulations to address these situations, preventing disputes and ensuring only one person claims the tax benefits for a child in any given year. For parents who are not filing a joint tax return, these rules provide a series of tests to identify which parent has the initial right to claim a child and any associated credits.
The foundation of the IRS approach rests on identifying the “custodial parent.” This designation is based on a physical residency test, not necessarily a legal custody agreement. For tax purposes, the custodial parent is the one with whom the child lived for the greater number of nights during the calendar year. Parents must count the nights the child spent in each home, and the parent with the higher count is the custodial parent.
A “night” is considered the time the child spends sleeping at a parent’s residence. If a child leaves one parent’s home in the evening and arrives at the other’s the next morning, the child is treated as having spent the night at the first parent’s home.
In the event that a child lives with each parent for an equal number of nights, the IRS applies a tie-breaker rule. Under this rule, the parent with the higher adjusted gross income (AGI) for the tax year is granted the right to claim the child.
While the custodial parent has the initial right to claim the child, the tax code allows this right to be transferred to the non-custodial parent. These rules apply to parents who are divorced, legally separated, or who have lived apart at all times during the last six months of the calendar year.
For the non-custodial parent to be eligible, the child must have received over half of their total support from their parents and be in the legal custody of one or both parents for more than half of the year.
The final requirement is that the custodial parent must agree to release their claim. This is done by the custodial parent signing a written declaration, which permits the non-custodial parent to legally claim the child and the associated Child Tax Credit.
The formal process for the custodial parent to release their claim involves specific IRS documentation. The primary document is Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent. While the form’s title refers to an “exemption,” its current function is to serve as the official written declaration for transferring the right to claim a child.
The custodial parent must complete and sign this form, providing it to the non-custodial parent. The form requires the name and Social Security number (SSN) of the custodial parent, the non-custodial parent, and the child. The custodial parent must also specify the tax year or years for which the release is effective, which can be for a single year, a series of specific years, or all future years.
A divorce decree or separation agreement can serve as a substitute for Form 8332. For this to be valid, the document must contain specific language that unconditionally states the custodial parent will not claim the child as a dependent for a specified year or years. It must also name the non-custodial parent who is entitled to the claim.
The non-custodial parent who is claiming the child must attach the completed and signed Form 8332 or the relevant pages of a substitute legal document to their tax return. For those who file electronically, the form or declaration must be submitted to the IRS through their tax software, often by attaching a PDF or by mailing Form 8453.
If both parents attempt to claim the same child without a valid release, the IRS e-filing system will likely reject the second return filed. If both returns are accepted, the IRS will send notices to both parents to resolve the conflicting claims. The agency will apply the tie-breaker rules, ultimately awarding the claim to the custodial parent unless a valid release is produced.
Claiming a child as a dependent determines eligibility for several tax benefits, but not all of them transfer with the claim. The Child Tax Credit is directly linked to who claims the child as a dependent; therefore, the parent who claims the child is the one who can claim this credit.
Conversely, several tax benefits remain with the custodial parent, even if they have released the claim, because they are tied to residency. The Head of Household filing status, which offers a larger standard deduction and more favorable tax brackets, is determined by who pays for more than half of the household costs and with whom the child lived for more than half the year.
Eligibility for the Earned Income Tax Credit (EITC) is also based on the child living with the parent for more than half the year. The credit for child and dependent care expenses also requires that the child live with the person claiming the credit to help cover work-related childcare costs.