For tax purposes, there is no such thing as joint custody, regardless of what your legal agreement says. Nor does a court order granting legal custody, automatically allow the tax benefits. The requirement, to be custodial parent, for tax purposes, is that the child live with you
MORE than 50% of the time. One of you has to be the custodial parent and the
other the non-custodial parent.
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 court order (divorce decree, custody agreement etc.) 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.
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 is true even if there is a court order allowing the non custodial parent to claim the dependent. The court cannot order those items to the non custodial parent.
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, Head of
Household filing status or the day care credit, based on that child,
even when the custodial parent has released the exemption to him. So,
it's good idea to let the other parent know that you will be claiming those
items, as many first time divorced parents are not aware of this rule and may
try to claim those items, which will cause the IRS to send out letters.
