New York Divorce Law Blog had a good post on this subject, IRS TAX EXEMPTION FOR CHILDREN AND DIVORCE AGREEMENTS
In 2008, the IRS amended Code Section 152(e), which addresses child dependency exemptions. The changes affect the procedures and means for claiming the exemption. The new rules should be carefully followed to ensure that the exemption is taken by the parent entitled to it, and that the appropriate language is contained in divorce or separation agreements to reflect the current state of the law.
1. A divorce agreement or court order can no longer be used as a substitute for Form 8332. The parties must actually complete the form.
2. Beginning in 2009, the custodial parent is the one with whom the child resides the greater number of nights during the year, regardless of the terms of the divorce decree.
3. Beginning in 2009, the custodial parent can unilaterally revoke the release of a child exemption for calendar years 2009 and beyond regardless of when the release was made.
In light of these developments, all non-custodial parents who plan to claim the exemption must obtain a signed Form 8332. In addition, divorce or separation agreements should address the potential for a release being improperly revoked after it is given.
Along similar lines is this from FOX 4 Finance: Divorce - WDAF
Many parents negotiate the allocation and use of the personal exemptions for the children on the tax returns. Usually, the parent in the higher tax bracket should claim the children to get a bigger benefit for the exemption (unless it gets phased out).
But keep in mind the ramifications of using the personal exemption: under the rules for education tax credits, only the parent who claims the child as an exemption AND pays the tuition can claim the credit. Also, a child tax credit can be lost if the child is claimed as a dependent by a parent who makes too much money (credit is phased out at $75,000).
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2 comments:
Sam,
My JOD states the following:
Income Tax Exemptions:
So long as he is current in his support obligations, the defendant father shall be entitled to claim the oldest and youngest children (T and M) as dependents for tax purposes: the plaintiff mother shall be entitled to claim the middle child (W) as a dependent. When only one child can be claimed as a dependent, so long as he is current in his support obligations, the defendant father shall be entitled to claim that child in alternate years, with the mother having even years and the father having odd years. The plaintiff mother shall sign IRS FOrm 8332 so as to permit the father to claim the exemptions as described above; this provision shall continue from year -to year so long as the defendant's child support payments are current. In the event wife's income is insufficient to benefit by a deduction for the middle child, William, the father shall be allowed the deduction pursuant to his being current in his child support obligations as specified above."
With that noted, I was advised by H&R Block that I could go ahead, tell my ex that I would be claiming all 3 for 2009 and file. I did. Now my ex is taking me to court to fight for his 2 deductions. (He forclosed on his home last year too).
Am I in trouble? Should I seek a tax attorney or divorce attorney?
DJ
You need to a lawyer for the court that ex has filed his paperwork.
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