Tax Brake with Robert G. Nath, Esq.

1. The parents must be divorced or legally separated, or separated under a written agreement, or lived apart the last 6 months of the year.
2. One or both parents must furnish over half the child's total support.
3. The child must be in the physical custody of one or both parents for more than half the year.
4. If the child is married, he or she did not file a joint tax return.
5. The child meets the citizenship and residency requirements of law.
6. The child's gross income for the tax year involved is less than the exemption amount for that year, or if it's more, the child is either under age 19 or is a student under age 24.

If all the above are met, then the person who provided over half the child's support meets the support test.

Note that “half” the child's support generally means support from all sources. This includes monetary support (payment in cash for books, food, clothing etc.) and the value of other support, such as the value of housing. Sometimes a grandparent will contribute, but that does not count unless there is a “multiple support agreement” in place.

But if the custodial parent signed Form 8332, or similar statement, releasing the exemption, then the noncustodial parent meets the support test. This requirement is strictly enforced to prevent abuse or misunderstanding. Moreover, the Form 8332 must be attached to your return to be effective. Letters attached to returns are not sufficient. But if you provide ALL of the Form 8332 information but not on that particular form, that will pass muster.

Otherwise, if no Form 8332 was signed, the custodial parent generally meets the support test. The only exceptions are for agreements signed after 1984 that unconditionally entitle the noncustodial parent to the exemption (and that parent provide at least $600 of support during the year), and multiple support agreements (involving support by parents, grandparents, etc).

If all the above does not thorough confuse you, try the graphic presentation at the IRS website here.

Enforcement.

The IRS is generally strict about enforcing the dependency requirements. There are cases every week in which such exemptions are challenged and litigated. Despite the personal hardship involved, the IRS attempts to adhere to the law. Therefore, the divorcing or separating couple should attempt to work out these issues as early as possible, and as completely as possible, to avoid later litigation and hassles from not only the other parent, but the IRS as well. As difficult as these dependent issues can be in particular cases, they get more difficult if they are forced to be litigated later on.

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