Section 152(e) of the Federal Tax Code provides that the custodial parent is generally entitled to the personal exemption for the qualifying child. To be a “qualifying child”, you must satisfy four tests:
In cases where the non-custodial parent wishes to claim the exemption, additional requirements must be satisfied:
In addition, to claim the exemption, one of the following documents must be attached to the return:
What does this mean for me?
If you’re the custodial parent, you are probably entitled to the tax exemption unless you have agreed to allow your spouse to claim the child on his or her taxes. To be sure, you should review your divorce decree or separation agreement (from the court) to determine who is allowed to take the exemption.
What if I have joint physical custody?
The IRS does not allow for a single exemption to be “split” between the two parties in the same year. Parties who share physical custody of their children on an equal or almost equal basis will generally have an agreement as to handle the income tax exemption(s). If they cannot agree, the IRS will decide for them based on Adjusted Gross Income.