Can it be part of the divorce decree who gets to claim the children for tax purposes?

Answer 1

Yes, but that is not the end of the story.

The divorce decree can specify who gets to claim the dependent exemption for the child for income tax purposes. However, there is a specific attachment the noncustodial parent must file with his or her tax return each year to claim the exemption.

In general, the IRS allows the custodial parent to claim the dependency exemption. The custodial parent is the parent with whom the child lived for the greater part of the year. The other parent is the noncustodial parent. If the parents divorced or separated during the year and the child lived with both parents before the separation, the custodial parent is the one with whom the child lived for the greater part of the rest of the year.

The rules as to when the noncustodial parent can claim the exemption changed effective for tax years beginning after July 2, 2008 (the 2009 calendar year for most taxpayers.)

POST-2008 DECREE OR AGREEMENT
For divorce decrees that went into effect after 2008, the custodial parent must sign Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent(or a similar form,) and give the signed form to the noncustodial parent to release the exemption. The noncustodial parent must attach that form to his or her tax return to claim the exemption that year.

The noncustodial parent can no longer attach certain pages from a divorce decree or separation agreement instead of Form 8332 if the decree or agreement was executed after 2008.

The custodial parent can specify on Form 8332 the release applies to only the current tax year or all future tax years. To help ensure future support, you may not want to release your claim to the exemption for the child for future years.

POST-1984 / PRE-2009 DECREE OR AGREEMENT
If the divorce decree or separation agreement went into effect after 1984 and before 2009, the noncustodial parent can still attach certain pages from the decree or agreement instead of Form 8332.

However, the custodial parent who gave up the exemption via the divorce decree does not appear to be without recourse. See "To revoke a prior release of exemption" below.

PRE-1985 DECREE OR AGREEMENT
The rules are again slightly different if the divorce decree or separation agreement went into effect before 1985. See the instructions for Form 8332 if that applies to your situation.


TO REVOKE A PRIOR RELEASE OF EXEMPTION
Form 8332 can also be used to revoke a prior release of exemption. The revocation is effective no earlier than the tax year beginning in the calendar year following the calendar year in which the custodial parent provides, or makes reasonable efforts to provide, the noncustodial parent with written notice of the revocation.

For example, if the custodial parent provides notice of revocation to the noncustodial parent in 2009, the earliest tax year the revocation can be effective is the tax year beginning in 2010. You can use Part III of Form 8332 for this purpose.

You must attach a copy of the revocation to your return for each tax year you claim the child as a dependent as a result of the revocation. You must also keep for your records a copy of the revocation and evidence of delivery of the notice to the noncustodial parent, or of reasonable efforts to provide actual notice.