This is question that arises frequently during a divorce or paternity action is which parent will be allowed to claim children for tax purposes on their tax return.
Referring to the Court Order or Divorce Decree in most cases will not helpful in cases because divorce decrees are usually silent on the issue.
The Child Tax Exemption Question falls under Federal Law rather than Texas Law
The short answer to the question in Texas of which parents gets to claim the children on their tax return is to look at the Court Order and find out which parent is the “Primary Conservator.” This parent is the one who will be allowed to claim the children on their tax return.
The reason for this is because of Internal Revenue Code Sec. 152(e) which provides that the custodial parent is entitled to the child dependency exemption. For IRS purposes determining the custodial parent can be accomplished by either:
- By looking at the Court Documents or
- Physical custody is which parent has the child for the greater number of nights per year
In most cases the above will be the parent who is “Primary Conservator” of the children.
Exceptions to the Rule and Sharing the Tax Exemption
The Internal Revenue Statute does provide a way for Parents to share the Tax Exemption. If the custodial parent signs IRS form 8332 stating that they will not take the exemption.
This form should then be attached when a parent files their tax return.
If the parents do decide to share the tax return it is important not to just have an assignment of the dependency exemption in the Divorce Decree or Court Order but to have an executed IRS FORM 8332 as well. This is because as stated before the Tax Exemption is governed by Federal Law and so parents will need to follow the federal procedures which is getting an executed IRS form 8332.
If this procedure is not followed, then the IRS may not allow the noncustodial parent from taking the exemption.
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