Tax Rules for a Non-Custodial Parent Claiming a Child

Noncustodial parents cannot take the earned credit income tax credit.

The custodial parent of a child is the parent the child lives with for the majority of the year. The non-custodial parent may contribute to the cost of supporting the child, such as with child support, but must follow different rules when filing income tax returns. While the custodial parent has the legal right to claim the child as a dependent and to claim credit for which she qualifies, such as the earned income credit, the noncustodial parent may only claim the child in limited situations.

Child Support

The payment of child support does not entitle a noncustodial parent to claim the child as a dependent. Child support payments are not tax deductible expenses for the noncustodial parent and are not considered taxable income for the custodial parent. The IRS may deduct delinquent child support payments from the tax refund of the noncustodial parent.

Claiming the Child as a Dependent

If all IRS requirements are met, a noncustodial parent may claim the child as a dependent and qualify for the child tax credit and the additional child tax credit, but not the earned income credit. The IRS requirements are: divorce decree or legal separation papers, parents lived apart for the last six months of the tax year, parents provided more than half of the child's support, one or both parents had custody of the child for most of the year and the custodial parent completes and signs IRS Form 8332 to release the claim to the exemption and allow the noncustodial parent to claim the child. The noncustodial parent must submit Form 8332, or a similar statement, with his income tax return. Different rules apply for divorces and separation that occurred before 1985.

Earned Income Credit

The noncustodial parent cannot use the child to qualify for the earned credit income, or EIC, even if the noncustodial parent has given permission to claim the child as a dependent. The EIC tax credit is for taxpayers with earned income under that is less $48,362. Some taxpayers may claim the earned income credit without a qualifying child if they meet the income limits. See IRS publication 596 for additional information.

Child Tax Credits

A noncustodial parent that meets the IRS requirements to claim the child as a dependent may claim the child tax credit if the child was under 17 years of age at the end of the tax year. The child tax credit allows a qualifying taxpayer to receive a refund of all or part of federal income taxes withheld from his pay. Some low-income taxpayers receive cash back even if they do not owe taxes. Taxpayers who take the child tax credit may be eligible to take the additional child tax credit. After completing the child credit worksheet on the income tax return form 1040 or 1040A, taxpayers should use Form 8812 to check eligibility for the additional child tax credit.

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