Are divorce decrees honored by the IRS? What if the child does not live with the parent, can that parent get full tax credit?

[becky_figueroa]

Can my ex-husband claim our daughter on taxes only due to child support being current?  Or does the child have to of had lived with the non custodial parent?

[macuser_22 · Accepted solution]

Only pre-2009 divorce decrees, but paying child support cannot be a condition in order to the child.  After 2009, the non-custodial parent can only claim if the custodial releases the exemption with a signed 8332 form which must be attached to the non-custodial parents tax return.

The IRS only cares about physical custody.  The parent where the child lived more than 1/2 (or greater part) of the tax year (more than 183 nights) is the custodial parent.

That does not mean that you can ignore any local court decree as the other parent can go to court to have it enforced and force you to issue the 8332 form or be in contempt, but that is a local family court issue, not a IRS issue.

See IRS Pub 17

https://www.irs.gov/publications/p17/ch03.html#en_US_2015_publink1000170876

Children of divorced or separated parents (or parents who live apart)

Post-1984 and pre-2009 divorce decree or separation agreement.   If the divorce decree or separation agreement went into effect after 1984 and before 2009, the noncustodial parent may be able to attach certain pages from the decree or agreement instead of Form 8332. The decree or agreement must state all three of the following.
    1.    The noncustodial parent can claim the child as a dependent without regard to any condition, such as payment of support.
    2.    The custodial parent won't claim the child as a dependent for the year.
    3.    The years for which the noncustodial parent, rather than the custodial parent, can claim the child as a dependent.

  The noncustodial parent must attach all of the following pages of the decree or agreement to his or her tax return.
    •    The cover page (write the other parent's social security number on this page).
    •    The pages that include all of the information identified in items (1) through (3) above.
    •    The signature page with the other parent's signature and the date of the agreement.

Post-2008 divorce decree or separation agreement.   The noncustodial parent cannot attach pages from the decree or agreement instead of Form 8332 if the decree or agreement went into effect after 2008. The custodial parent must sign either Form 8332 or a similar statement whose only purpose is to release the custodial parent's claim to an exemption for a child, and the noncustodial parent must attach a copy to his or her return. The form or statement must release the custodial parent's claim to the child without any conditions. For example, the release must not depend on the noncustodial parent paying support.

[macuser_22]

I did not answer all of your question: you asked "can that parent get full tax credit"?

No.  If the exemption is released to the non-custodial parent, the non-custodial parent can claim the child's exemption and Child Tax Credit only.   The other credits, such as the Earned Income Credit (EIC) and Child Care Credit both require that you physically live with the child to claim, so only the custodial parent can claim those credits.

Refer to the Pub 17 link above for full information.

[becky_figueroa]

I have not signed any form.  He claims the IRS stated that he has the right to claim her based on divorce decree alone.  Which this would be his year, however, the only support he has given this child is the child support.  I am the custodial parent who provides 99% financial support and the child lives with me.  She has spent 5 nights in 5 years with her father.  So what benefit does he have to claim  her? Doesn't he have to state she lived with him?

[macuser_22]

The IRS told him no such thing, or if they did he misstated the situation.

If this is a recent divorcee decree, the IRS does not care one wit about it.  They only care about where the child lived and the 8332 form.   If you do not give him a 8332 then he cannot (legally) claim the child reguardless of what the decree says.   Like I said the IRS does not referee divorce decree enforcement, he would have to pursue local legal action if he thinks you are violating the decree.  A local judge can enforce it, not the IRS.   

Living with the child is not a requirement to be able to claim the exemption and child tax credit, but he does need the 8332 form signed by you.  Like I said, if the decree does give him the right to claim, perhaps you should consult your attorney before you violate the decree and refuse to issue him that form.

You can still claim the EIC and child care credit and file Head of Household it that applies.

He can, of course  claim the child anyway without the 8332 form.   You can just file claiming the child that you are entitled to (if he e-files first, your return  will reject and you will have to paper file).

The IRS will pay both refunds, but within a year or so (the IRS is slow) you will both get letters asking if you claimed the child in error and to amend your return to remove the child if you did.   Do not ignore the letter, respond that you are the custodial parent and did not release the exemption.

The IRS will send a 2nd letter asking for evidence that the child lived with you,  school records, doctor records, and other records can establish that.

The IRS will make a determination as to who is entitled to claim, which should be you.  The other parent will have to pay back any refund plus interest and possible penalties.

[becky_figueroa]

Thank Your for your help.  Im not sure how to file. I usually file head of household since I provide for her. Im just confused as to what he benefits from claiming her if he cant get EIC. He states IRS said she doesn't need to live with him at all to obtain this credit.  Tax law sucks...lol

[bwa]

Tax law sucks...lol

You don't have a tax law problem.  He does!  As far as the IRS is concerned, he can't claim the child as any type of dependent unless you consent and provide him with a Form 8332.  If he does and the IRS tries to resolve the issue, you win.  Hands down.

Your divorce decree may require you to allow him to claim the dependent but that's not tax law, that's a local family court decision.  The resolution to that is to go back to court and have the decree modified.

I agree with Macuser's statement when he said that if he thinks the IRS said that, he misinterpreted what they said.  Alternatively he never asked but said he did, or the individual IRS person was wrong.

[becky_figueroa]

Thank You. I don't feel he will take me to court due to the fact he is in contempt of paying me for legal fees and he never honored any of the visitation.  I don't want to be in trouble for not signing the 8332 form.  But I do not feel he should get earned credit due to paying child support alone.  He has told me I am illegally filing my taxes and he has talked to the IRS.

[macuser_22]

Read what I posted and the Pub 17.   He *cannot* claim the EIC under *any* circumstances.   Only *you* can claim that.   The same goes for Head of Household.  Both of those credits *require* that the child actually live with you in order to claim.   He can *only* claim the child's exemption which will reduce his taxable income (not his tax) by $4,000, and give him the $1,000 child tax credit if he otherwise qualifies for that credit.   

Those are the *only* two credits that he can claim per decree,  and 8332.

Only *you* can claim the EIC, Child Care Credit and Head of Household filing status.  

Those credits cannot be split another other way.

[macuser_22]

Here are all the rules put another way:


Custodial Parent
These are a paraphrase of the IRS rules for divorced or separated parents that live apart.

See “Children of divorced or separated parents or parents who live apart” in IRS Pub 17 for full information.
<a rel="nofollow" target="_blank" href="https://www.irs.gov/publications/p17/ch03.html">https://www.irs.gov/publications/p17/ch03.html</a> - en_US_2015_publink1000170877This assumes that the child is under age 18 (in most states).  Once the child becomes an adult (Emancipated child), custody becomes mute and these rules no longer apply.(See examples 5 & 6 in Pub 17 for more information)
There is no such thing in the Federal tax law as 50/50, split, or joint custody.  The IRS only recognizes physical custody (which parent the child lived with the greater part, but over half, of the tax year.  That parent is the custodial parent; the other parent is the noncustodial parent.)

Who can claim the exemption and credits depends on who is the custodial parent. (By the IRS definition of custodial parent for tax purposes - this is not the same as the custody that a court might grant.).

The test that the IRS uses to determine the custodial parent is where the child lived for more than 1/2 (or greater part) of the year. The IRS will go so far as to require counting the nights spend in each household - that person is the custodial parent for tax purposes (if exactly equal and more than 183 days - The custodial parent is the parent with the highest AGI, if less than 183 days then neither parent has custody). And yes they are that picky.
See Custodial parent and noncustodial parent  under the residency test in Pub 17
<a rel="nofollow" target="_blank" href="https://www.irs.gov/publications/p17/ch03.html">https://www.irs.gov/publications/p17/ch03.html</a> - en_US_2015_publink1000170891)

Only the Custodial parent can claim:
-Head of Household
-Earned Income Credit
-Child Care Credit

The non custodial parent can only claim:
-The Exemption
- The Child Tax Credit

See Special rule to divorced or separated parents (or parents who live apart).
<a rel="nofollow" target="_blank" href="https://www.irs.gov/publications/p17/ch03.html">https://www.irs.gov/publications/p17/ch03.html</a> - en_US_2015_publink1000170897

But only if specifically specified in a pre-2009 divorce decree, separation agreement or the custodial spouse releases the exemption with a signed 8332 form - after 2009 the IRS only accepts a signed 8332 form that must be attached to the non-custodial parents tax return.

This does NOT mean that the custodial parent can ignore any Decree or court order allowing the non-custodial parent to claim the exemption - they can be required to issue the 8332 form. They could be required by the court to do so or be in contempt.

See “Children of divorced or separated parents or parents who live apart” in IRS Pub 17 for full information.
<a rel="nofollow" target="_blank" href="https://www.irs.gov/publications/p17/ch03.html#en_US_2015_publink1000170897">https://www.irs.gov/pub...>
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