Form 8332 is a tax form signed by a custodial parent to release their claim to a dependency exemption for a child and give it to the non-custodial parent.
The custodial parent is the parent with whom a child spends more than half the year. This is generally measured based on who the child spends the night with.
Note the use of the phrase “more than half.” In a non-leap year, this means 183 nights. In a leap year, it means 184 nights.
Tax law generally says only the custodial parent can claim a dependency exemption for a child.
But in cases of divorce or separation, parents can agree that the non-custodial parent will claim the child in certain years, or every year. In this case, the non-custodial parent should have the custodial parent sign a Form 8332.
What About the Divorce Decree?
The divorce decree is usually the document that dictates who claims the kids. Unfortunately, the IRS says (for divorces or separations happening after 2008) the divorce decree is irrelevant. Form 8332 is required to be attached to the non-custodial parent’s tax return in order for them to claim the child, regardless of what the divorce decree says. See the instructions to Form 8332 for more information.