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Divorce and Claiming Dependents – Tax Tip of the Week March 24, 2010

Posted by bradstreetblogger in : Tax Tip , trackback

Tax Tip of the Week | Mar. 24, 2010 | No. 33
What you need to do

Many times a divorcee decree will grant the noncustodial parent the right to claim as dependents minor children in alternating years. For example, the custodial parent can claim the child(ren) in years ending with even numbers, and the noncustodial parent can take them as dependents in years ending with odd numbers.

New this year
The IRS now requires Form 8332 be attached to the return of the noncustodial parent in the years when claiming dependents. The IRS will no longer accept copies of divorcee decrees or any other documentation relating to the right to claim children as dependents.

Completing this form is very simple and only needs to be done one time. All that is needed is for the custodial parent to list the years they are releasing claims to exemptions all the way until the year the child turns 18. (Note—it would probably be a good idea to carry through to the age of 22 in the event the child remains a full-time college student.) Copies can then be made and attached to the noncustodial parent’s return in future years.

If the noncustodial parent is electronically filling his or her return, the Form 8332 must be attached to Form 8453 and mailed to the IRS.

The custodial parent does retain the right to revoke their written declaration in future years if facts and circumstances dictate. This would be accomplished by filing and attaching a new Form 8332 in the year of that election.

Editorial Note: I really wish divorcee attorneys would include the completion of this form as part of all the other divorce documents that are prepared and signed.

As always, give us a call if you have any questions. In Dayton, call 937-436-3133 and in Xenia, call 937-372-3504. Or visit http://www.bradstreetcpas.com.

Rick Prewitt – the guy behind TTW

…until next week.

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