In general, the custodial parent gets to claim dependency exemptions and credits for their minor children. However, this can become complicated in situations where the noncustodial parent wishes to claim them, or when the main custodial parent is not apparent. If you are not clearly the custodial parent of children that you wish to claim, the Form 8332 is essential.
The Form 8332, or Noncustodial Parents Dependency Exemption, allows the custodial parent to sign away the right to claim dependent children for this year and even future years, if they wish. Without this form, the IRS will not allow you to claim them, even if there are court orders and other documents specifying that you get to do so. There are a few famous cases illustrating this.
First, there is the case of Xionghui He. Although he wasn’t the ‘primary residential parent’, dependency courts had ordered that he could claim the children as long as child support payments were current. However, when the time came to file taxes, his ex-wife refused to sign a Form 8332. Mr. He attached a copy of the order allowing him to claim the children instead. The matter went to tax courts, where he was denied the exemption for lack of a Noncustodial Parents Dependency Exemption.
On the other hand, there have been several cases where a noncustodial parent convinced the primary residential parent to sign away tax exemption rights for the remainder of the child’s life. Although the custodial parent contested this on at least one occasion and said they don’t recall signing it, courts upheld the noncustodial parent’s right to claim the minor children until fraud could be proven. People are allowed to revoke their permissions given in an 8332, but only for future tax years.
The right to claim dependent exemptions can make a huge difference in a person’s tax bill and thus is hotly contested in many divorces. However, the court order is inconsequential without a Form 8332. If a custodial parent refuses to sign it, the noncustodial parent may have recourse through family courts. However, they cannot claim the children without it. It is essential to get this form signed before you claim any nonresidential dependents on your taxes.
