General Rules for Claiming Dependents

• The tax rules allow divorced parents to claim each child as a dependent on their respective tax returns. By claiming children as dependents, taxpayers can reduce their tax liabilities and gross income base. To claim a child as a dependent, taxpayers must have resided with the child for the majority of the year, have financial responsibility for the child, and the child must be younger than 19 unless the child is a full-time student. Parents may claim their full-time student children as dependents until age 24.
  
  

Divorce Residency Rules

• For divorcing parents, the tax laws provide an exception to the residency requirement. Generally, the custodial parent claims the child as a dependent on her tax return -- absent a court order or property settlement agreement stipulating otherwise -- since the custodial parent typically spends more time with the child during the tax year. The tax code allows divorcing parents to agree upon which parent can claim the child as a dependent. Parents may also ask courts to decide upon the allocation if parents are unable to decide between themselves.
  
  

Judicial Determination and Waiver

• Some judges may base their allocation upon which parent is the higher-income earner or allow one parent to claim the exemption in alternating years or split the dependents between the taxpayers if there is more than one child. If there is a court order addressing the dependent allocation, then the parent claiming the dependent should attach the court order with his tax returns. Additionally, the non-custodial parent must obtain a signed declaration from the other parent waiving the dependency claim for that tax year or use IRS Form 8332.
  
  

IRS's Default Rules

• Absent a court order or agreement between parents, the IRS allows the parent living with the child for the majority of the year to claim the child as a dependent. If both parents spend an equal amount of time with the child, then the IRS allows the parent with the higher gross income to claim the child as the dependent for that tax year.
  
  

Considerations

• Since tax laws frequently change, you shouldn't use this information as a substitute for legal or tax advice. Seek advice through a certified accountant or tax attorney licensed to practice law in your jurisdiction.