Do I still need a Form 8332 my child is 19 and...

[bluemoon]

Do I still need a Form 8332. I am divorced and was the non-custodial parent and had a Form 8332 that expired on the day my daughter turned 18. For the current taxes (to be filed by April 15, 2024) for reasons linked to Student Financial Aid it would be better for me to claim my child as a dependent and the child who is now 19 wants me to claim as it puts them at an advantage for Financial Aid purposes. Do I still need a Form 8332 Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent because all "custody" issues terminated when the child turned 18 per the Family court. 

Thank you in advance and appreciate your response and guidance. If the answer is I don't need it because the child is an "adult now"...wondering if TurboTax will fix this as they clearly have the name and dob of the child/dependent in the database as was preparing my taxes.

[DMarkM1]

As long as someone else (ex spouse) is not claiming your child, you don't need a form 8332.  Your daughter does however need to meet the tests to be your dependent whether as qualifying child or qualifying relative (see tests below extracted from Publication 501).

Qualifying Child Tests:

1. The child must be your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, or stepsister, or a descendant of any of them.
2. The child must be (a) under age 19 at the end of the year and younger than you (or your spouse if filing jointly); (b) under age 24 at the end of the year, a student, and younger than you (or your spouse if filing jointly); or (c) any age if permanently and totally disabled. (Must be full-time student for any part of at least 5 months in the tax year) 
3. The child must have lived with you for more than half of the year (absences to attend school or vacations count as time with the parent).
4. The child must not have provided more than half of the child’s own support for the year.
5. The child must not be filing a joint return for the year (unless that joint return is filed only to claim a refund of withheld income tax or estimated tax paid).

Qualifying Relative Tests:

1. The person can't be your qualifying child or the qualifying child of any other taxpayer.
2. The person either (a) must be related to you in one of the ways listed under Relatives who don't have to live with you, or (b) must live with you all year as a member of your household (and your relationship must not violate local law).
3. The person's gross income for the year must be less than $4,700.
4. You must provide more than half of the person's total support for the year.

If your ex spouse does intend to claim your daughter then the tiebreaker rules for children of divorced parents apply.  The custodial parent will get the credit. 

Generally, whoever your daughter spent the most nights with when not at school will be the determining factor. You will need to answer the dependent questions to indicate your daughter lived with you more than 6 months (time away for school counts as parent time) and spent the most nights with you and there is no 8332 agreement.  

[bluemoon]

I should have mentioned, it is my biological child and yes their income for the 2023 is less than $3200, so below the threshold. What is confusing that at 19 you considered an adult and the Form 8332 uses language that is more common to the "Family Courts" as custody matters all cease for the most part unless if a child is disabled (which is not the case here) at the age 18. The dependent has expressed a desire to be on my taxes as a dependent as it helps in the College Financial Aid award.

Hence, the question is Form 8332 still required if the child/dependent is 19 and an adult for all legal purposes because the Form uses language of Custodial Parent and Non-Custodial Parent. The issue of "Custody" ceased to exist as Family Courts no longer have any jurisdiction. Thank you.

[Hal_Al]

Q.: Do I still need a Form 8332 if  my child is 19?

A. No. When the child reaches emancipation age for her state, she is no longer in anybody's "custody" and form 8332 is no longer applicable. You should still coordinate with the other parent, to be sure, she is not claiming the student. She would still have "first claim", as the parent the child lives with. 

Q. If the answer is I don't need it because the child is an "adult now"...wondering if TurboTax (TT) will fix this as they clearly have the name and dob of the child/dependent in the database as was preparing my taxes?

A. No. TT still presents you with the custodial agreement interview. The permission only needs to be verbal now. Ignore TT's suggestion  that you MAY need form 8332. 

[bluemoon]

Request clarification...your response indicated "State", but Form 8332 is addressing Federal filing/issue. Could you please clarify? Thank you.

[Opus 17]

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@bluemoon wrote:

Request clarification...your response indicated "State", but Form 8332 is addressing Federal filing/issue. Could you please clarify? Thank you.

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The "special rules for children of divorced or separated parents" end when the child is "emancipated" (legally an adult).  In most states, this is age 18, but it may differ in a few states.  The laws of the state where your child lives determines whether or not they are emancipated, even though this status also affects the federal return. 

Assuming your child is considered an adult of legal age, then the special rules no longer apply.  The ability to claim the child as a dependent is determined only by the base rules in publication 501 and not the special rules.  For a 19 year old child, this means that the child is considered the dependent of the parent where they live more than half the year, but only if they are also a full time student.  For the definition of "lived with", being away at college is usually considered a temporary absence and the child is considered to live with the parent they would have lived with if not at college.  

The parent where the child does live more than half the year is the only parent who can claim the child and they don't need a signed release from the other parent.  The parent where the child does not live more than half the year can't claim them even if they were to get a signed release. 

[Hal_Al]

@Opus 17  said "The parent where the child does live more than half the year is the only parent who can claim the child and they don't need a signed release from the other parent.  The parent where the child does not live more than half the year can't claim them even if they were to get a signed release". 

 I think it goes like this: The parent where the child does live more than half the year is the only parent that can still claim the child under the "Qualifying Child" (QC) dependent rules.   The parent where the child does not live (more than half the year) can only claim them under the "Qualifying Relative" (QR) rules and then only if the other  parent agrees not to claim the child as a dependent (it does not have to be in writing). There are two significant differences. The QR dependent can not have more than $4700 of income and  the parent (the child does not live) with must provide more than half the student's support (the QC rule is only that the student didn't provide more than half his own support). 

The "special rule for children of divorced or separated parents" that come to an end when the child is "emancipated" (legally an adult) was the ability of the parents to "split the child" for tax purposes. 

There is a special rule in the case of divorced & separated (including never married) parents. When the non-custodial parent is claiming the child as a dependent/exemption/child tax credit; the custodial parent is still allowed to claim the same child for Earned Income Credit, Head of Household filing status, and day care credit. This "splitting of the child" is not available to parents who lived together at any time during the last 6 months of the year; then only one of you can claim the child for any tax reasons. The tax benefits may not be split in any other manner.

[Hal_Al]

@bluemoon  Another issue to consider when  divorced or separated parents are deciding who will claim the student: the Earned Income Credit (EIC). Since Parent A (the one the child lives with) can claim the student under the Qualifying Child (QC) rules, that parent can claim the EIC based on that "child" being their dependent.  Parent B cannot claim the EIC, even if the student  is his dependent, because the student is not his QC, only his qualifying relative dependent. 

Regardless of which parent paid the tuition and expenses, only the parent that claims the student as a dependent can claim the education/tuition credit.  He/she can claim the credit, even if the other parent paid all the bills.