If you do not give the noncustodial parent assigned form 8332, the only other way the noncustodial parent can claim the children as dependence is if they lie and say the children live in their home more than half the night of the year. Depending on other facts and circumstances, this may end up giving the noncustodial parent additional tax benefits that they are not allowed to claim, such as the ability to file as head of household, claim earned income credit, or the dependent care expense credit. And, if you leave the child completely off your tax return, you may be denied some of the same benefits.
If you choose, you may list the children on your tax return by indicating that they live with you more than half the year, and then say yes to the custody question and yes to the question, “will you be giving the other parent a signed form 8332?“. The children will be added to your tax return with the status of “not a dependent this year“ but may qualify you to file as head of household or to claim the earned income credit depending on your other circumstances. You must then give the noncustodial parent a signed form 8332. You can print this form from the section on “other tax situations“ or you can download it from the IRS website. After that, your responsibility is finished. If the noncustodial parent correctly uses the form 8332 when filing their tax return, they will claim the correct tax benefits and there will be no e-filing hassles or conflicts. If the noncustodial parent does not use form 8332 correctly, then their tax return may be rejected, or they may get an audit letter from the IRS.
