Can a Parent Claim a Deduction for a Child if He Has Not Exercised His Parenting Time
A couple divorced and the custody judgment says that each parent gets to take a deduction for one of their two children. They are supposed to exercise equal parenting time. However, this past year the father only had the children for approximately forty days. Can the father still take the deduction, even though the children really lived with the mother?
Re: Can a Parent Claim a Deduction for a Child if He Has Not Exercised His Parenting
There are two sides to this issue.
First, as far as the IRS is concerned, it will follow its own qualifying child rules even if a state family court has issued a custody order that awards a deduction to a parent who does not qualify for a deduction. The parents can change that by filing a Form 8332, through which the spouse who is entitled to the deduction assigns the deduction to the other parent. If both parents claim the deduction for a single child, the IRS will investigate to determine which parent should get the deduction.
Second, as far as the custody court is concerned, the parents are to abide by the custody order unless and until it is amended. If the order says that each parent gets one deduction, that's what the court expects to happen. If the court says that each parent must execute a Form 8332 as necessary to allow the other spouse to claim the deduction, that's what it expects to happen. If a parent wants to change the order, the parent should file a motion with the custody court.
So a parent may be eligible to take a deduction for both children and, with no Form 8332 filed, be able to get both deductions approved by the IRS, but then potentially be held in contempt by the custody court and be ordered to reimburse the other spouse for the difference in their tax bill resulting from their not being able to claim the deduction.