Q: Does Form 8332 affect the Child Tax Credit?
IRS Form 8332 Instructions | eHow
he for sure would have tried to "fight" me on this tax thing if he had his act together enough. last tax years attempt was lame. he lied and said he filed and claimed a kid. i told him, yea right since i never gave him form 8332. i went to file, tax person said he hadn't filed any kids or filed anything on the home. i found out he lied, from a co worker of his, because he owed money to the IRS so he was afraid to file. he forgot to uncheck the boxes for dependents after divorce and had me and 2 kids still listed. HAHA! wasn't his first time screwing up on those checking/unchecking of boxes at his work either.
IRS Form 8332 - Farzad Family Law
In an action for breach of contract, an award of money damages to compensate the nonbreaching party for the financial loss resulting from the breach is an appropriate "contract remedy." Thus, in the event a custodial parent, having agreed to waive the right to claim the tax exemption for the child by signing IRS Form 8332 so as to allow the exemption to be claimed by the noncustodial parent, thereafter breaches the agreement, contractual enforcement under ORS 107.104 would best be accomplished by simply granting to the noncustodial parental a money award for the of the exemption, thereby compensating the noncustodial parent for the increased tax liability resulting from the custodial parent's breach.
The Tax Court disregarded the terms of a state court divorce judgment in disallowing a dependency exemption where the noncustodial parent failed to obtain a Form 8332 or an equivalent release from the custodial parent. Shenk v. Comm'r, 140 T.C. No. 10 (5/6/13).The three children resided with Julie for more than half of 2009, and Julie did not execute Form 8332 or equivalent document for any year. As of the end of 2009, Michael was up to date on his child support payments. Julie was not employed in 2009.Specifically, in odd numbered years, Julie would be entitled to claim the two younger children as dependency exemptions on her income tax returns, provided that Julie was employed and earning income. Michael would be entitled in odd numbered years to claim oldest son as a dependency exemption on his income tax returns, provided that Michael was current with his child support payments as of the end of the year. In even numbered years, Michael's and Julie's entitlement to the these dependency exemptions would be reversed, with Michael having two exemptions and Julie having one, again providing that Julie was employed and earning income and Michael was current with his child support payments at the end of the year. The judgment did not, however, provide that Julie had to execute in Michael's favor a Form 8332, Release of Claim to Exemption for Child of Divorced or Separated Parents.The Tax Court held that since Julie, the custodial parent, did not execute Form 8332 or an equivalent release, Michael was not entitled to claim the disputed dependency exemption deductions or the child tax credit. The court pointed out that under the general rules on dependency exemptions, Michael could not have claimed his children as dependents for 2009 because they did not share the same place of abode with him for more than one-half of the year. However, in the case of divorced parents, special rules determine which parent may claim a dependency exemption deduction for a child. Under Code Sec. 152(e), a child may be treated as a qualifying child of the noncustodial parent (here, Michael) rather than of the custodial parent provided that certain requirements are met. Among the requirements that must be met, the custodial parent must sign a written declaration that the custodial parent will not claim the child as a dependent; and the noncustodial parent must attach that written declaration to his or her return for the tax year.