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Child custody has tax implications for divorced parents

| Feb 12, 2016 | Child Custody |

Tax season is in full swing, and most people in Oregon are readying to file their tax returns. For parents, listing all dependent children is an important part of receiving the correct exemptions, but what about divorced parents? Only one parent may claim a child, and which one gets to do so is usually determined by the child custody agreement.

As a default, the parent with primary custody — also referred to as a custodial parent — is granted the right to claim the child as a dependent on his or her income tax return. However, not every divorced couple is the same, and some parents might not be sure how to proceed when their needs do not reflect the default. In instances when a noncustodial parent wants to claim a child on his or her tax return, a special form is required.

The Form 8332 gives a noncustodial parent the right to file for and receive a dependent deduction for his or her child. However, simply having the form is not sufficient. It must be signed by the custodial parent and sent back to the IRS along with the noncustodial parent’s tax return. Who gets to file in which years is usually laid out in either the divorce settlement or the custody agreement.

Which parent gets to claim a child might be obvious for some couples, but for others the answer can be more complex. Some parents share joint child custody while others might choose to alternate years for claiming child. Ultimately, a noncustodial parent in Oregon must first obtain a signed Form 8332 before he or she can successfully claim a dependent child on a tax return.

Source: Forbes, “Tax Dependency Exemptions For Noncustodial Parents – It Is All About Form 8332“, Peter J Reilly, Feb. 2, 2016

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