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IRS Form 8332: Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent
A common divorce issue: which spouse can claim the children as exemptions on their Form 1040? An exemption is a specific type of tax deduction that reduces your AGI (adjusted gross income) as part of determining your Taxable Income. Generally, the custodial parent claims the exemption. But if the spouses can agree, the non-custodial parent can claim it.
- Sometimes parents switch the exemption every other year.
- Sometimes the exemption election is permanent.
- Sometimes a custodial parent who allowed a permanent switch revokes it.
IRS Form 8332 reports all three of these circumstances.
“The only real problem with IRS Form 8332 is getting your former spouse to sign it.”
Gary Bode, Wilmington NC CPA and tax accountant
The Three Parts of Form 8332
- Part I: Release of Claim to Exemption for Current Year – Form 8332
- Part II: Release of Claim to Exemption for Future Years (If completed, see Noncustodial Parent on page 2.) – Form 8332
- Revocation of Release of Claim to Exemption for Future Year(s) – Form 8332
What is an Exemption Worth?
CPAs see rancor over this emotional issue. Perhaps because it sounds like the exemption saves $3650 in taxes. But actual tax savings = the parent’s marginal tax rate x $3,650. Which makes it less than $1,000.
Wrinkles in Form 8332
It must be used for separations or divorces occurring in 2008 and later. Earlier divorces have more lenient rules discussed below. Use IRS Form 8332 only if there is one person claiming the exemption. In cases of multiple support for the child, use IRS Form 2120 – Multiple Support Declaration.
We’re a Wilmington NC CPA Firm experienced in divorce tax issues. We serve a broad geographical base via our virtual office. Please read any of our posts to gauge our expertise, proactive attitude and commitment to customer service. We offer a free initial phone consultation on divorce issues. (910) 399-2705.
Separation and Divorce Decrees BEFORE 2008 but AFTER 1984
You do not need to file Form 8332. Instead, per the IRS, 1. The noncustodial parent can claimt he child as a dependent without regard to any condition (such as payment of support. 2. The other parent will not claim the child as a dependent. 3. The years for which the claim is released. The noncustodial parent must attach all of the following pages from the decree or agreement.
● Cover page (include the other parent’s SSN on that page).
● The pages that include all of the information identified in (1) through (3)above.
● Signature page with the other parent’ssignature and date of agreement
