| In reviewing Part II of the tax preparer's questionnaire, | | | | parent can claim two specific exemptions for his or |
| we can see that there is an exception to the rule that | | | | her child(ren). These exemptions are: |
| *all* the child-based tax benefits can go to one | | | | (1) the dependent exemption, and |
| taxpayer only. | | | | (2) the child tax credit. |
| When parents are divorced, separated, or unmarried | | | | In order for the non-custodial parent to be able to claim |
| but live apart for at least the last six months of the | | | | these two credits, the following must all be true: |
| year, the custodial parent (who usually gets all the | | | | - The parents must be either legally divorced or |
| bennies) can grant two specific exemptions to the | | | | separated under a divorce or separation decree, a |
| non-custodial parent. This is referred to as the | | | | written separation agreement, or lived apart for at |
| "special rule" and it applies, as long as the | | | | least the last six months of the year, marital status |
| correct paperwork has been filed. | | | | being irrelevant. |
| The custodial parent usually is the one to receive | | | | - Both parents provided, in total, at least half of the |
| child-based tax credits, since he or she can easily | | | | child's total support for the year. |
| meet the required "residency" test of living | | | | - One or both parents has the child in their custody at |
| with the qualifying child(ren) for more than six months | | | | least six months of the year. |
| of the year. | | | | - If divorced during 2009, the custodial parent signs a |
| It has been pointed out that the non-custodial parent | | | | waiver (called Form 8339) granting the non-custodial |
| who doesn't earn much money but pays child support | | | | parent the right to claim an exemption for the child(ren), |
| is unfairly penalized by the lack of tax credit. (Child | | | | and gives to the non-custodial parent to attach to his |
| support payments are not deductible.) In fact, the state | | | | or her tax return. --OR-- If the divorce was finalized |
| of New York and the District of Columbia grant a | | | | after 1984 or before 2009, and the divorce papers |
| state EITC to its taxpayers who are non-custodial | | | | give the non-custodial parent the right to claim the child |
| parents, to offset the poverty which often follows | | | | exemption, then a copy of those papers must be |
| divorce and child support payments. As far as I know | | | | attached to the non-custodial parent's tax return. |
| they are the only two states who offer such a tax | | | | So, to recap: In a divorce or separation situation where |
| credit. | | | | a waiver of child dependent exemption exists, the |
| The Federal IRS and remaining state tax boards are | | | | EITC goes to the parent or other individual who meets |
| strict about EITC recipients and their claimed child(ren) | | | | all the eligibility tests--including residency. This usually |
| passing the residency test. | | | | disqualifies the non-custodial parent. There is some |
| Can a non-custodial parent get any federal tax relief | | | | relief, although it does require some cooperation from |
| with respect to their child(ren)? It turns out that if he or | | | | the custodial parent, and codification through filing the |
| she meets all of the following criteria, the non-custodial | | | | correct waiver paperwork. |