Federal law: whoever's got custody 51% of the time gets to claim the child as an exemption, unless there's an agreement to shift the exemption to the other parent, and the parent who's giving up the exemption for that year signs an IRS form doing so.
The above attorney is correct. Whichever parent has custody for a greater number of days gets to claim the child. If both parents had the child an equal number of days, the one with the highest AGI gets to claim the child.
First and foremost, always follow any court orders dictating who may claim the exemption. However, the court can only determine who gets the dependency exemption and Child Tax Credit. This is accomplished by the custodial parent signing a Form 8332 which allows the non-custodial parent to claim the exemption. But Section 152 always controls who gets the Head of Household status, dependant care expenses, and Earned Income Credit based on the child. Those always go to the parent that had the child the greatest number of days.
This is a very popular question. The first place to look is your Divorce Decree, or Child Custody Agreement. This is an important matter and should be discussed before tax time. The next place to look is Federal Law. My colleagues are correct, Federal Law dictates that the parent who has custody the majority of the year, is entitled to the tax benefits.
If the Orders of the Court do not address this issue, you should consider petitioning the court to have the matter resolved once and for all. The issue can cause bad blood between the parties and create turmoil. It would do everyone much good to clear up this issue - Divorce is hard enough.
I hope this helps.
Steven A. Leahy
Please note that the above is not intended as legal advice, it is for educational purposes only. No attorney-client relationship is created or is intended to be created hereby. You should contact a local attorney to discuss and to obtain legal advice.
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