2009 tax year and forward, the Child Dependent Exemption Tax Deduction rules related to divorce have been amended by the Internal Revenue Service.
The changes to the 2009 tax code are as follows:
1. The custodial parent, for 2009 & forward, is the one with whom the child resides the greater number of nights during the year, regardless of the divorce decree terms.
2. You must obtain IRS Form 8332 (Release of Claim to Exemption for Child of Divorce or Divorced Parents) to claim the exemption if you are the non-custodial parent. The divorce agreement or court order will not be used to substitute for IRS Form 8332.
3. The custodial parent can unilaterally revoke the release of a child exemption for calendar years 2009 & forward, even if the release was made prior to 2009.
The parent claiming a dependency exemption on the child/children is the only parent eligible for the following tax benefits:
- Dependent Exemption Deduction
- Child Tax Credit
- Child and Dependent Care Credit
- Education Credit or Education Expense Deductions
- Earned Income Credit
- Head of Household Filing Status
With all the new changes, all non-custodial parents who plan to take a dependency exemption should obtain IRS Form 8332 for 2009 & forward tax years. A divorce agreement or court order cannot be substituted!
In any future settlement agreements that include a provision for a non- custodial parent to take a dependency deduction for one or more children in one or more future tax years, have the custodial parent complete IRS Form 8332 when executing the settlement agreement. Sometimes it is very difficult to get ex-spouses to sign off on papers at a later date!
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