Having kids is expensive. Actually, a lot of things are expensive in life, but the IRS has chosen having kids as something for which you should get a break on your federal income taxes. So we have a tax exemption for each child any taxpayer has and believe you me, it adds up to a lot of money subtracted from your taxable income!
You may be familiar with the child exemption from filling out paperwork when you started your last job. The W4-form has a line which asks you to write how many children you have. The higher the count of children, the lower the withholding will be on your paycheck. The IRS figures that if you have kids, you’re going to need all the money you can get to take care of them. Therefore, those with more child exemptions on the W4 form will have bigger paychecks.
So, needless to say the child exemption is worth a bit of money. What happens when parents get divorced? Who gets to claim these nice child exemptions? The divorce courts decide this…whoever is the custodial parent gets to claim the exemption for any child or children the couple has.
But this doesn’t mean that’s the way has has to be. The noncustodial parent can claim the exemption for children if the couple decides that’s the way they want it to be. All they have to do is fill out IRS Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent.
What is IRS Form 8332?
Form 8332 allows divorced parents to direct the child exemption to the noncustodial parent. Then if they change their mind again want the custodial parent to take the exemption, Form 8332 is submitted again, revoking the original directive. In that case, it would be called Revocation of Release of Claim to Exemption… etc.
IRS Form 8332 hardly qualifies as a form. It’s more of a signature page with a page and a half of instructions. The custodial parent simply signs his or her name, prints child’s name, fills in his or her Social Security Number, dates it and mails it in.
For a look at Form 8332 visit the IRS website here and also get full instructions.f8332