21.7 Special Rule for Divorced or Separated Parents

A special rule for divorced or separated parents allows the parent with whom the child lives for the greater part of the year (the custodial parent) to waive the exemption in favor of the other parent (the noncustodial parent). The special rule applies only if the following threshold conditions are met: (1) the child receives over one-half of his or her total support for the year from one or both parents, (2) the parents are divorced or legally separated under a decree of divorce or separate maintenance, separated under a written separation agreement, or live apart at all times during the last six months of the year (this includes parents who were never married to each other), and (3) the child is in the custody of one or both parents for more than half the year.

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image Planning Reminder
Form 8332 Waiver Applies to Child Tax Credit
If a custodial parent releases the right to claim a dependency exemption for his or her child on Form 8332 (or substitute statement), the release also gives the noncustodial parent the right to claim the child tax credit and the additional child tax credit, assuming the credits are not phased out; see 25.2.
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The first condition is not met, and the special rule does not apply, if a parent and other individuals contributing more than 10% of the child’s support enter into a multiple support agreement (21.6) authorizing the parent to claim the exemption.

Custodial parent and noncustodial parent.

For purposes of the special rule, the custodial parent is the parent with whom the child resides for the greater number of nights during the year. The other parent is the noncustodial parent. A child who is temporarily absent is treated as residing with the parent with whom the child would otherwise have resided on that night. If during the year the child resides with both parents for an equal number of nights, the parent with the higher adjusted gross income is treated as the custodial parent.

How the special rule works.

The noncustodial parent is entitled to the exemption for the child if the above threshold conditions are met and the custodial parent provides a written waiver on Form 8332 (or similar statement) releasing the exemption for the taxable year to the noncustodial parent, and the noncustodial parent attaches the waiver to his or her return. If a pre-1985 divorce decree or written separation agreement gives the exemption for 2012 to the noncustodial parent, that provision has not been changed after 1984, at least $600 of the child’s support for the year is provided by the noncustodial parent, and the child is totally disabled, the noncustodial parent may claim an exemption for the child for 2012.

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image Caution
Custodial Parent’s Revocation of Waiver Not Immediately Effective
A custodial parent can use Part III of Form 8332 to revoke a previous waiver of the right to an exemption for a child. The revocation takes effect for the year following the year in which a copy of the revocation is provided to the noncustodial parent. Thus, if you made a revocation on Form 8332 and you gave a copy to the noncustodial parent in 2011, the revocation can take effect for 2012, and you can claim the exemption if you attach the revocation to your 2012 return. If you provided the copy of your revocation to the noncustodial parent in 2012, the revocation cannot apply until 2013.
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A waiver on Form 8332 (or similar written release) by the custodial parent must specify the year or years for which it is effective. The waiver cannot be conditioned on the payment of support, or the meeting of some other obligation, by the noncustodial parent.

If a post-1984 decree or agreement executed before 2009 states that the noncustodial parent has the unconditional right to claim the exemption for the child, and that the custodial parent is waiving the exemption for a specified year or years, the noncustodial parent can attach to his or her return the relevant pages from the decree or agreement instead of attaching Form 8332. The attachment must include the page that gives the noncustodial parent the unconditional right to the exemption, the page showing the custodial parent’s waiver, the cover page, on which the custodial parent’s Social Security number should be written, and the signature page showing the custodial parent’s signature and date of the agreement.

The option to attach pages from a decree or agreement is not available if the decree/agreement was executed after 2008. The noncustodial parent may claim the exemption only by obtaining the custodial parent’s waiver on Form 8332 (or similar written release) and attaching that to his or her return.

Custodial parent may revoke waiver.

A custodial parent who has waived the exemption in favor of the noncustodial parent can revoke the waiver. The revocation can be made in Part III of Form 8332.

However, a revocation has a delayed effect. It does not apply until the year after the year in which you give a copy of it to the noncustodial parent or make a reasonable attempt to do so. For example, you are the custodial parent of your daughter and on Form 8332 you waived your right to the exemption for the years 2008 through 2013. In 2011 you revoked your waiver on Form 8332 and gave a copy of it to the noncustodial parent. You can claim the exemption for your daughter on your 2012 return. However, if a copy of the revocation was not given to the noncustodial parent until 2012, the revocation is not effective until 2013. You must attach a copy of the revocation to your return for each year that you claim the exemption.

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