For many taxpayers, claiming their children represents significant tax advantages. These include claiming the dependent exemption, the child tax credit or the childcare credit. In some cases a taxpayer will not file a tax return and wants to allow another person to claim his child. These situations include allowing a noncustodial parent to claim the child or allowing another individual who helped support the child claim her. In either situation, the taxpayer needs to complete a form communicating this to the Internal Revenue Service.
When two parents choose not to live together, they both contribute financially to the upbringing of the child. One parent might provide a home for the child, while the other parent pays child support. The IRS only allows one parent to claim the child on her tax return. In most cases, the custodial parent, or the parent who provides the home, claims the child. In some cases, the custodial parent agrees to let the noncustodial parent claim the child. The custodial parent must complete IRS Form 8332 to pass this right to the noncustodial parent.
Form 8332, or the Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent, provides a written documentation passing the right to claim the child to the noncustodial parent. This form includes three separate sections. The first section allows the custodial parent to release the claim for the current year. The second section allows the custodial parent to release the claim for future years. The third section allows the custodial parent to cancel the release for future years.
In some cases, multiple people provide support for a child. These might include a parent, a grandparent or another relative. While each of these individuals provided support, only one can claim the child on his tax return. The individual who claims the child needs to include IRS Form 2120 with his tax return.
Form 2120, or the Multiple Support Declaration, requires the taxpayer filing the claim to identify each of the other taxpayers eligible to claim the child. The taxpayer needs to obtain a signed statement from each of those taxpayers stating they each waived their right to claim the child. By including each individual on the form, the taxpayer indicates that she received these statements from the other individuals, including the parent.