Child dependency claims by noncustodial parents

By Wei-Chih Chiang, CPA, DBA; Karen Pierce, CPA, DBA; and Jianjun Du, Ph.D.

Photo by MCCAIG/iStock

When a couple divorce, the divorce decree may grant the noncustodial parent the right to claim a child or children as dependents for tax purposes. While the law known as the Tax Cuts and Jobs Act (TCJA), P.L. 115-97, reduced the personal exemption for taxpayers, spouses, and dependents to zero for tax years 2018 through 2025, the special rule of Sec. 152(e) allowing a noncustodial parent to claim a child as a dependent is still important because it also allows the noncustodial parent to claim a child tax credit, which the TCJA increased and expanded. To claim this tax benefit, however, the noncustodial taxpayer should closely follow the special rule's statutory and regulatory requirements, about which taxpayers often have misperceptions.

Sec. 152(e) applies to parents who are divorced, legally separated, or living apart during the last six months of the calendar year and provide more than one-half of the child's support for the calendar year. The child must be in the custody of one or the other parent for more than half of the year (Sec. 152(e)(1)). If these requirements are met, the custodial parent may then release the right to claim a dependency exemption under Sec. 152(e)(2) to the noncustodial parent. To release his or her claim to the dependency exemption, the custodial parent must sign a written declaration for the years that he or she is not claiming the child as a dependent, which must be attached to the noncustodial parent's tax return.


The IRS issued Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent, for parents to use to satisfy the written-declaration requirement. Form 8332 requires the custodial parent to furnish the name or names of the child or children for whom the claims are released, the year or years for which the claims are released, the custodial parent's Social Security number (SSN), and the name and SSN of the noncustodial parent. The custodial parent must also sign and date the form. Use of Form 8332 is not mandatory, though, and parents may satisfy the written-declaration requirement by attaching a document conforming to the substance of the form and executed for the sole purpose of serving as a written declaration under Sec. 152 (Regs. Sec. 1.152-4(e)(1)(ii)).

A court order, decree, or separation agreement executed in a tax year beginning after July 2, 2008, may not serve as a written declaration. Additionally, the written declaration must be unconditional. That is, the custodial parent's release cannot require satisfaction of any condition such as the noncustodial parent's fulfillment of a child support obligation (Regs. Sec. 1.152-4(e)(1)(i)). The custodial parent may revoke a written declaration by providing a written notice of revocation to the noncustodial parent (Regs. Sec. 1.152-4(e)(3)(i)).

Even if the noncustodial parent may claim the child as a dependent under Sec. 152(e), this does not entitle him or her to head-of-household filing status, the earned income tax credit, the child and dependent care credit, or the exclusion from income for dependent care assistance, any or all of which only may be claimed by the custodial parent (Notice 2006-86).


A review of numerous court cases involving the release of claim suggests the following practical advice to noncustodial taxpayers.

Noncustodial parents often have a misperception that they may claim a child as a dependent merely by paying child support. However, this is irrelevant for the release of claim (see, e.g., Allred, T.C. Memo. 2014-54). Moreover, noncustodial parents commonly think that once the divorce decree, separation agreement, mediation agreement, or court order grants them the dependency exemption, they can claim it even if the custodial parent violates the agreement by refusing to sign a release. Again, this is a misunderstanding. If a custodial parent violates the agreement, the noncustodial parent must go to the state court for a remedy, not the IRS (see Armstrong, 139 T.C. 468 (2012), aff'd, 745 F.3d 890 (8th Cir. 2014)).

Sec. 152(e)(2) requires Form 8332 or other sufficient written declaration to be attached to the noncustodial parent's tax return. Regardless of this requirement, in many court cases, noncustodial parents did not attach Form 8332 or any other written declaration to their tax returns.

A written declaration should specify the children and tax years for which a custodial parent releases the claim (see Loffer, T.C. Memo. 2002-298). Specifically, if there are several children, and a custodial parent does not release all of them, a written declaration should clearly identify the ones the custodial parent will not claim as dependents. Likewise, if the custodial and noncustodial parents agree to claim a child as a dependent in alternate years, the years assigned to the noncustodial parent should be identifiable. A written declaration specifying "all future years" is treated as specifying the first tax year after the execution year and all subsequent years.

Taxpayers should carefully maintain a copy of the original Form 8332 or other written declaration. If the claim to the dependency exemption is released for more than one year, the noncustodial parent must attach the original release to the tax return for the immediate tax year and attach a copy of the release to subsequent tax returns. The Tax Court has held that the failure to attach a copy of a Form 8332 because the form was destroyed in a fire (Chamberlain, T.C. Memo. 2007-178) or irretrievable from previously filed tax returns (Vokovan, T.C. Memo. 2013-37) was not a legitimate excuse for the lack of a Form 8332.

Be aware that the release of a claim to the dependency exemption can be revoked by the custodial parent and, regardless of a prior valid Form 8332 or conforming document, the noncustodial parent will lose the right to claim a dependency exemption. If this happens, and the custodial parent is required to provide a release, the noncustodial parent may pursue a remedy in state court for the custodial parent's failure to provide the release.


The ability to claim a child as a dependent and thus claim a dependency exemption for the child remains important even after the TCJA repealed the exemption for tax years 2018 through 2025. To take the child tax credit for a child, a taxpayer must be able to claim the child as a dependent. Under Sec. 151(d)(5)(B) and Notice 2018-84, the reduction of the exemption to zero under the TCJA does not affect whether the exemption is allowed or allowable for purposes of other provisions of the Code. Under the TCJA, the amount of the child tax credit is doubled to $2,000 per qualifying child, and the phaseout threshold has increased dramatically. These changes make the child tax credit more valuable and available to middle-income noncustodial taxpayers. Therefore, careful compliance with the requirements of the special rule in Sec. 152(e) can be even more important to CPAs' clients.

Wei-Chih Chiang, CPA, DBA, and Jianjun Du, Ph.D., are associate professors of accounting at the University of Houston—Victoria in Katy, Texas. Karen Pierce, CPA, DBA, is an associate professor of accounting at Morehead State University in Morehead, Ky.

To comment on this article or to suggest an idea for another article, contact Paul Bonner, a JofA senior editor, at or 919-402-4434.

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