Posted in another thread - got me wondering

[CJane]

What is the name of your state? MO

My ex and I got divorced in Jan '04. We're each allowed to claim one of the children each year for taxes, and signed the appropriate form from the IRS allowing that at the courthouse when the divorce was finalized.

However, I just read this...

I don't think the forms are created in advance 3, 5 or 10 years.
The form for that year is produced that year.

on the child support board, and I'm now wondering if this form has to be filled out/signed each year when we have a court order that states which of us gets which child.

Help?

 

[BelizeBreeze]

Generally, whoever provides the bulk of the financial support can claim the children on the tax return. It doesn't matter how many months or days you provided the support, simply that your share of the support is more than 50%

There's a special test for divorced or legally separated parents, though. In this case, the "custodial parent" (simply, the one who had custody of the child for more than half the year) is treated as meeting the support test, even if the noncustodial parent actually paid most of the child's support.

If the split is amicable and both partners are interested in maximizing the tax benefit, the custodial parent is able to sign a waiver on Form 8332, allowing the noncustodial parent to claim the exemption for the child. The waiver can apply to the current year only, or all future years.

Furthermore, IRC section 151(c)(1) allows taxpayers an exemption for dependent children. In the case of divorced parents, the custodial parent gets the exemption. That parent, however, may release his or her claim to the exemption, allowing the noncustodial parent to claim the deduction. The custodial parent does this by signing Form 8332, Release of Claim to Exemption for Child of Divorced or Separated Parents, which the noncustodial parent attaches to his or her tax return.

In lieu of form 8332, the noncustodial parent may attach a written declaration conforming to the substance of form 8332. To meet the requirements of IRC section 152(e)(2), this statement must include the

1. Name of the dependent child.
2. Year(s) for which the claim to the exemption has been released.
3. Signature of the custodial parent confirming consent to release the tax exemption.
4. Social Security number of the custodial parent.
5. Date of the custodial parent’s signature.
6. Name and Social Security number of the parent claiming the exemption.

Special rules apply in the case of joint or “split” custody. In this situation, the parent who has custody for the greater part of the year is considered the custodial parent. An executed shared custody agreement incorporated as part of a divorce decree may stipulate the noncustodial parent is “entitled to claim” the children as dependents. However, such a stipulation may not effectively grant the dependency exemption to the noncustodial parent for federal tax purposes. A release of claim of exemption in a divorce decree must meet the written declaration requirements of section 152(e)(2).

 

[CJane]

If the split is amicable and both partners are interested in maximizing the tax benefit, the custodial parent is able to sign a waiver on Form 8332, allowing the noncustodial parent to claim the exemption for the child. The waiver can apply to the current year only, or all future years.

<snip>

Special rules apply in the case of joint or “split” custody. In this situation, the parent who has custody for the greater part of the year is considered the custodial parent. An executed shared custody agreement incorporated as part of a divorce decree may stipulate the noncustodial parent is “entitled to claim” the children as dependents. However, such a stipulation may not effectively grant the dependency exemption to the noncustodial parent for federal tax purposes. A release of claim of exemption in a divorce decree must meet the written declaration requirements of section 152(e)(2).

Ok, so I'll do some digging through the actual decree and see what EXACTLY it says, and make sure that the form that we signed says 'all future years' or something similar to that.

Last year, I claimed the youngest as a dependant (per our decree) and both kids for EIC. The ex was/is incredibly pissed off about it, and threatening to claim both kids this year since I 'cheated' last year - though I followed every guideline that Turbotax warned me about...

 

[seniorjudge]

Ok, so I'll do some digging through the actual decree and see what EXACTLY it says, and make sure that the form that we signed says 'all future years' or something similar to that.

Last year, I claimed the youngest as a dependant (per our decree) and both kids for EIC. The ex was/is incredibly pissed off about it, and threatening to claim both kids this year since I 'cheated' last year - though I followed every guideline that Turbotax warned me about...

I'm interested in what you find. Some of those divorce decrees written in KC are incomprehensible.

 

[CJane]

I'm interested in what you find. Some of those divorce decrees written in KC are incomprehensible.

You should see my parenting plan.

 

[Snipes5]

Whomever has the children for the majority of the year gets the EIC. A decree can't give that one away. Tell your ex to calm down, you didn't "steal" anything.

Also, the exemption rules are based primarily on RESIDENCY, not support. The person who has the kids for the majority of the year (183 days) is the one who gets the exemption, and/or has the right to sign it away, based on IRS rules.

Unfortunately the new definition of "qualifying child" is ambiguous. Look for TY2005 to be a very confusing year in this regard, and expect some sort of IRS clarification after the tax season is over.

Snipes

 

[MomIsWorried]

In Re: BelizeBreeze's reply...you must also include the kids' social security numbers.

Tax laws can be very sticky (I took a tax course last year, and ended up working in a tax office for the 2004 filing season), especially in dealing with who can claim the children as dependants and for the EIC.

Sometimes a child meets the rules to be a qualifying child of more than one person. However, only one person can claim the EIC. If the individuals cannot agree on who claims the child for the purpose of EIC, the tie-breaker rule applies. The parent with whom the child lived for the longest period of time during the year gets to claim the EIC. If the child lived with both parents for an equal amount of time during the year, the parent with the higher adjusted gross income gets to claim the EIC.

The 8332 has a Part 1 and a Part 2...Part one in the release of claim to exemption for the current year. Part 2 is the release of claim to exemption for future years, in which you do have to specify which years are being released.

Hope this helps!

 

[MomIsWorried]

Just wanted to add that no matter what the divorce decree says, it's always a wise idea to cover your arse and attach the 8332...better to do it when you file than to have your refund delayed by the IRS because they have no idea what your divorce decree says.

 

[CJane]

Whomever has the children for the majority of the year gets the EIC. A decree can't give that one away. Tell your ex to calm down, you didn't "steal" anything.

Also, the exemption rules are based primarily on RESIDENCY, not support. The person who has the kids for the majority of the year (183 days) is the one who gets the exemption, and/or has the right to sign it away, based on IRS rules.

Unfortunately the new definition of "qualifying child" is ambiguous. Look for TY2005 to be a very confusing year in this regard, and expect some sort of IRS clarification after the tax season is over.

Snipes

The ex wouldn't qualify for EIC anyway. I made less than $12,000 last year, and he made about $54,000, not including investment income. I have the kids 60% of the time.

The following is the exact wording of the section of my decree that addresses deductions - I can't find my copy of the Form 8332, would it possibly be on file @ the courthouse or something like that, or could I have the ex sign a new one since the decree says that there should be one?

Husband shall be entitled to declare Oldest Child as his dependent on his federal and state income tax returns and to claim the accompanying deduction and tax credit.

Wife shall be entitled to declare Cady as her dependent on her federal and state income tax returns and to claim the accompanying deduction and tax credit.

Both parties agree to execute Internal Revenue Service Form 8332 in order to effectuate the provisions of this paragraph.

 

[MomIsWorried]

Do you remember signing the 8332 at the time of your divorce? The reason I ask is because when I got divorced, I was told that I had to obtain the form on my own and have the ex sign it, it is not something that was included in our divorce paperwork. On the years when my ex can claim one of our children, I fill out a new form 8332 for him.

 

[Snipes5]

The custodial parent does not need form 8332 to claim the children.

The child's SSN is NOT required on the 8332, and it need not be on the decree, either.

If you expect to have "issues" with your ex, make SURE you file first, and do it electronically.

The IRS will then take the position that you are correct, and will automatically reject your ex's attempt to take exemptions to which the ex is not entitled.

Snipes

 

[MomIsWorried]

The custodial parent does not need form 8332 to claim the children.

Ummm.....

Wife shall be entitled to declare Cady as her dependent on her federal and state income tax returns and to claim the accompanying deduction and tax credit.

Both parties agree to execute Internal Revenue Service Form 8332 in order to effectuate the provisions of this paragraph.

I believe in this case, yes the custodial parent does need the form 8332.

The child's SSN is NOT required on the 8332, and it need not be on the decree, either.

I was responding to BelizeBreeze's post...

In lieu of form 8332, the noncustodial parent may attach a written declaration conforming to the substance of form 8332. To meet the requirements of IRC section 152(e)(2), this statement must include the

If the parent attaches a written declaration conforming to the substance of the 8332, the child's SSN most certainly does need to be included. This is the IRS we are talking about!

 

[Snipes5]

For openers, the IRS doesn't give a flying fig WHAT the court has to say on who *should* sign the 8332, according to the judge. They never have, and they likely never will.

Further, if a CP sends in an 8332 with a tax return, the IRS is likely to assume (in their infinite non-wisdom), that the CP is an NCP, and will then disallow the EIC, which can go ONLY to the custodial parent. Note that I am referring to the IRS definition of a CP, and no other.

There are times, and this is one of them, that it is better NOT to flood them with extra documentation!

Also, you do NOT need to put the child's SSN on the form because it is already on the return itself. Go take a LOOK at a form 8332, and you will plainly see that there is no place to list it. A substitute for form 8332 will not need to have MORE info that the actual form.

You mentioned that you had done taxes for one year. Congratulations. However, you might be better off checking your facts before giving people information they don't need, and which could potentially harm them in their dealings with the IRS.

After your first year, you should have realized just how little you actually know. The volume of tax knowledge necessary to be fully competent is staggering.

Snipes

 

[BelizeBreeze]

Just for point of reference to whomever decides to stick in their 2 cents, my post came from www.irs.gov.

Now, if there is any questions as to snipes' or my comment, take it up with them.

 

[abezon]

Actually, the laws on dependents and divorced/separated parents was dramatically amended for tax year 2005, making lots of IRS pubs obsolete anr/or incomplete.

The old law required the noncustodial parent to submit a Form 8332 or a divorce decree/CS order that included all the elements of a Form 8332 (signed by the CP). This provision applied to parents who were never married, too.

Under the "Working Families Tax Relief Act of 2004", the NCP must now submit a copy of a divorce decree/separation agreement signed by the judge. The new law contains NO provisions for a CP to voluntarily waive the dependency exemption, so Form 8332 is defunct unless Congress covers this issue in the technical corrections bills. Also, parents who were never married can't have a divorce decree -- so a never-married NCP couldn't claim the child anyway.

I've heard rumors that the IRS will continue to accept 8332s for divorces that were finalized prior to Oct. 2004. It could be that the IRS won't care as long as the child isn't claimed twice.