Is there a new publication stating that if a non-custodial parent is behind in child support payments, they are not allowed to claim that child as a dependent?

[rachelmdennis89]

My ex-husband is about $3000 behind in his child support payments and it is his turn to claim our son this year.  I have heard there was a new publication going around that stated they would reject this if it was tried.  Something about not wanting them to get away with not paying their child support and having the government pay it for them at the end of the year?  I mean, either way I know I'll get paid back but I was just wondering.

[Hal_Al · Accepted solution]

There is no such rule. What you may have heard of is a written analysis of what the current rules actually say. There are probably many of them. The custodial parent has first priority on claiming the children on her taxes; regardless of the amount of support provided by the non-custodial parent. The non-custodial parent can only claim the child as a dependent if the custodial parent gives permission (on form 8332) or if it's spelled out in a pre 2009 divorce decree. Even if a divorce decree, dated after 2008, gives the non-custodial parent the right to claim the child, he must still get form 8332 from the custodial parent. A properly worded decree should require her to provide that form.

If there is a court approved divorce agreement giving the noncustodial parent the right to claim the child, and that clause is not dependent on the payment of child support, then he can still claim the child, under that agreement. BUT the IRS will not enforce a post 2008 divorce decree.  The non-custodial parent's only remedy, if the custodial parent claims the child, is to take her back to court.

Here's something else, you should be aware of:  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.

Note in particular that the non-custodial parent can never claim the Earned Income Credit, based on that child.

[rachelmdennis89]

How did I not know all of this?!  How do you "split" the child without bunging everything up and having one or the other rejected?  We have literally nothing of taxes in our divorce decree.  It was a very simple divorce back in 2011, I received full custody and we went on our way.  Do we still fill out the form 8332 to both claim him as a dependent?

[Hal_Al]

If you want to allow the ex to claim the child, you send him for 8332. If you don't, don't sent it to him (it would be polite to tell you will be claiming the child, so he cant). The splitting is so common that TurboTax can handle it. It's a matter of putting the right information on the tax forms.
You are the only one that fills out form 8332, you send it to him not the IRS. You do not both, technically, "claim him as a dependent".
He claims the child as a dependent and you have a "Qualifying child" for Earned income credit, head of household filing status and the day care credit.

If you do let him claim the children, you might want to point out, to him, the above info (that his claim is limited).

How do you not know this? Blame your congressman or woman. This is just one small part of  very complex tax laws.

[bwa]

There is no such change in the statute.  Exemptions are based on custody unless the custodial parent transfers the exemption to the noncustodial parent.

[bwa]

In the Indiana Parenting Time Guidelines it says that the parents should switch back and forth every year

What's fair is open to interpretation, and what's "fair" to one is likely to be considered unfair by the other.  The statute used to equate claiming the exemption to the parent who paid the most support of the child.  Now it is based on custody, with the custodial parent (the one with whom the child lives more than 1/2 of the year) the one to claim the exemption unless they transfer it to the other parent.

Obviously, local courts may write decrees to the contrary, but a local court decree is not binding on the federal Government.  Consequently, if a local court decree is not followed, the recourse is through a local court order, not the IRS.

The "Indiana Parenting Time Guidelines" adopted by the Indiana Supreme Court are just that - guidelines, not mandatory rules, and are not binding on the IRS.

[rachelmdennis89]

See, this is why I would just switch back and forth each year...much simpler.  Thanks, though!

[SweetieJean]

Many parents do this without any issues. However, if there's a falling out of some kind, all bets are off.

[Hal_Al]

"See, this is why I would just switch back and forth each year...much simpler"

 It doesn't work that way. Just because you are NOT claiming the child for any tax attributes, does not meant that the ex can. He can NEVER claim that child for the Earned Income Credit, Head of Household or Day care credit.

[rachelmdennis89]

I understand that...it just gets complicated. That's all I was saying!

[SweetieJean]

In researching Indiana, I found this as to State taxes:

Requires a court to include in a court order that a parent who is ordered to pay child support may only claim the child as a dependent if the parent has paid at least 95% of the parent's child support for the calendar year for which the parent is ordered to claim the child as a dependent by January 31 of the following year. 

http://www.in.gov/apps/lsa/session/billwatch/billinfo?year=2011&request=getBill&docno=1427

[rachelmdennis89]

That must have been what I'd heard!! Thank you!

[SweetieJean]

First, the noncustodial parent cannot claim the child unless the custodial parent transfers that right via a signed IRS Form 8332. It doesn't matter if it is "his turn." Second, judgments for back child support can be seized from tax refunds.

[rachelmdennis89]

Really?  In the Indiana Parenting Time Guidelines it says that the parents should switch back and forth every year, and in an effort to be fair that's what I've always done.  It's undeserved, but fair.  And I know they can be seized, I fully expect that to happen, but I had thought they were going to begin rejecting the entire thing if it was found they owed.  Oh well, all is well that ends well.

[SweetieJean]

The IRS doesn't care what the divorce decree says, or what the parents agree to. However, if the custodial parents refuses to provide the noncustodial parent with the Form 8332 for the NC's parent "year," a Family Court action could be brought.