Agreement for Claiming Child on Taxes

Parents may agree, or family judges may order that the non-custodial parent be able to apply for the child to be dependent and eligible for the child tax credit. Oklahoma courts of appeals have consistently held that the right to claim a child as a dependant for tax purposes is a modifiable issue of child support and that judges have jurisdiction to grant the federal income tax exemption to children. A judge can ask a custodial parent to sign IRS Form 8332 so that the non-custodial parent can claim a child for a specific tax year. The IRS has issued “Form 8332” (Release/Revocation of Child Exemption Application by Custodial Parent), which allows parents to meet the written declaration requirement. Form 8332 requires the custodial parent to provide the name(s) of the child(ren) for whom the claims are released, the year or years for which the claims are released, the Social Security Number (NSS) of the custodial parent, and the name and Social Security Number of the non-custodial parent. The custodial parent must also sign and date the form. However, the use of Form 8332 is not mandatory and parents may satisfy the written declaration requirement by attaching a document that corresponds to the content of the form and is executed exclusively for the purpose of being written in the form of a written declaration in accordance with § 152 (Regs. Article 1.152-4(e)(1)(ii)). If you give the non-custodial parent the completed Form 8332, you will receive more than one dependant. For example, additional child tax credits are only available to the person claiming the child as a dependant. The Internal Revenue Service (IRS) allows you to potentially reduce your tax by filing a dependent child on a tax return. If you do not file a joint tax return with your child`s other parent, only one of you can declare the dependent child.

If both parents claim the child, the IRS will generally grant the right to the parent with whom the child lived the most during the year. If you, as a custodial parent, decide to claim your child again as a dependant after handing it over to the non-custodial parent, you can do so by completing part three of Form 8332. You can do this for the specific tax years you list or write “all future years.” The recovery of dependency does not take effect until the taxation year following the calendar year in which you provide Form 8332 to the non-custodial parent of your child. In other words, if you provide the form in 2019, you can recover the dependency on your 2020 tax return at the earliest, which you will file in 2021. The possibility of claiming a child as a dependant and therefore claiming a child support exemption remains important even after the lifting of the exemption for the 2018 to 2025 taxation years by the TCJA. To claim the child tax credit for a child, a taxpayer must be able to ask the child to be dependent. Pursuant to paragraph 151(d)(5)(B) and Communication 2018-84, the reduction of the exemption to zero under the TCJA does not affect whether the exemption is permitted or permitted for the purposes of other provisions of the Code. Under the TCJA, the amount of the child tax credit will be doubled to $2,000 per eligible child, and the exit threshold has increased significantly. These changes make the tax credit more valuable for children and accessible to middle-income non-caregivers.

Therefore, scrupulous compliance with the requirements of the special rule of § 152 (e) may be even more important for CPA clients. If parents divorce without opinions or a well-designed agreement, questions may arise as to who is entitled to the tax benefits of child support. Although the non-custodial parent may claim the child as a dependant under section 152(e), this does not entitle the parent to the head of household registration status, income tax credit, child and dependent parents credit, or income exclusion from care assistance, which can only be claimed in whole or in part by the custodial parent (Communication 2006-86). Bottom line: Add Form 8332 to your return if you are requesting that a child be released by the other parent or to revoke your previous release of the child as a dependant. According to the court: “Unfortunately for [H], the regulations explicitly state that separation orders, orders and agreements signed in a taxation year after July 2, 2008 do not meet the written declaration requirement. [Reg.] Article 1.152-4(e)(1)(ii)(5). [H] Divorce records cannot therefore be considered as written statements because they were issued after 2 July 2008 and therefore [H] did not comply with the written declaration requirement under Article 152. “If you have custody of your child, but you want to release the right to claim your child as a dependant of the non-custodial parent, you must complete Form 8332. All it takes is your child`s name, the tax year, your Social Security number, then your signature and date.

If you prefer to release your application for more than one taxation year, enter the same information in the second part rather than in the first part. Once you`re done, give the form to the parent who doesn`t have custody of your child, not the IRS. They will file it with their tax return. If you are releasing your application for multiple tax years, you only have to fill out the form once: the other parent will attach copies of the original to their tax return each year. Lessons Learned: A taxpayer requires proof of “eligible child” or “eligible parent” status from individuals to declare them as dependents, unless a valid Form 8332 is filed ..

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