Tax Exemptions for Non-Custodial Parent?

As you may know, which parent gets the dependency exemptions for the child or children is an issue that is often raised in a divorce or parenting agreement. Generally, the Judgment for Dissolution of Marriage or Parenting Agreement will specify which parent gets to take the exemption for each child; there are instances where the non-custodial parent will be awarded the exemption, either every year or in alternating years. In June of 2009, the IRS released a memo clarifying the rules regarding a non-custodial parent's right to claim a dependency exemption for a child. In short, this memo said clearly: if a non-custodial parent will be taking the exemption for a child, the custodial parent must fill out IRS form 8332 (before, there was ambiguity in the Code as it stated form 8332 must be filled out, or another form conforming to the substance of form 8332).

Thus, if your case is pending, it might be wise to include language that Form 8332 be completed on a yearly basis in order to avoid conflict if a non-custodial parent will be taking an exemption for a child.