For tax filing purposes, having custody is not necessarily the same as it is for a divorce decree or custody agreement. While a divorce decree or custody agreement can state that one parent has custody of a child, the requirement for the IRS generally depends on which parent the child lived with for the greater number of nights. The IRS cares only about who is the custodial parent. Tax law says only the custodial parent can claim the child and all associated tax benefits.
The child's noncustodial parent must be eligible to claim the child as a dependent. The rules for claiming a dependent usually require the parent to live with the child for more than half the year. This rule can be waived when the parents are divorced, separated or live apart from each other.
For this waiver to apply, more than half of the money needed to support your child must come from the custodial and the noncustodial parent. In addition, your child must not live with anyone other than the custodial and the noncustodial parent for more than six months of the year. Therefore, if the child's noncustodial parent isn't eligible, giving them a completed Form 8332 doesn't change the fact that they can't claim the child.
Now, the custodial parent can waive his or her claim to the child by signing a Form 8332 and giving it to the non-custodial parent. If the non-custodial parent cannot get the other party to sign a Form 8332, they are unable to claim the dependent.
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