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Lawrence D. Gorin
Lawrence D. Gorin, Tax Attorney
Category: Tax
Satisfied Customers: 1505
Experience:  30+ years of legal experience. Special emphasis in divorce & family tax matters.
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Regarding the 18 year old and dependent question from several

Customer Question

Regarding the 18 year old and dependent question from several months ago. I understand the part :
Under the IRS rules the custodial parent is the parent with whom the child lived for the greater part of the year. The other parent is the noncustodial parent.
The IRS will award dependency exemption to the custodial parent.

fact: Child is 18, divorce decree addresses no issues beyond 18, nor does it address college expenses.
fact: The historical custodial parent wil not be paying any of the college expenses. The non-custodial parent will be paying the expenses.
fact: The college student will be living on campus away from both parents for most of the year.
fact: The student's address per college enrollment is the historical custodian parents address (is this important?)
Question: Can the non historical custodian parent claim the child's college expenses or claim child as dependent without the form 8332 "release" from the historical custodian parent?
Submitted: 4 years ago.
Category: Tax
Expert:  Wendy Reed replied 4 years ago.

Thank you for giving me the opportunity to assist you. I will give the best answer that I can with the information provided.

 

When a child is living at college, this is considered a temporary absence and would not change the fact that the custodial parent is still the custodial parent.

 

The non custodial parent may not claim the child's college tuition expenses or claim the child as a dependent without Form 8332 or equivalent. The rules for children of separate or divorced parents still apply. The only parent that may take a college credit or deduction is the parent that claims the child as a dependent.

 

This answer presumes that the child is still considered a qualifying child (does not pay more than 1/2 the cost of supporting himself) and that both parents together pay more than 1/2 the cost of supporting the child.

 

If the noncustodial parent pays college expenses but the custodial parent benefits from it (such as the custodial parent taking a college credit for the dependent child) then this is something that the family may wish to address in family court for purposes of child support amount or non-custodial parent's obligation for tuition.

Expert:  Lawrence D. Gorin replied 4 years ago.
YOUR QUESTION:
Can the historical non-custodial parent claim the child's college expenses or claim child as dependent without the form 8332 "release" from the historical custodian parent?

ALTERNATIVE ANSWER FROM DIFFERENT EXPERT.....:
Claiming the child’s college expenses
YES, if you satisfy the qualifying conditions, you can take a tax deduction for college tuition and other mandatory school fees. This is called the Tuition and Fees Deduction, and is reported directly on Form 1040 or Form 1040A. This tuition deduction is temporary: 2009 is scheduled to be the last year that taxpayers can take this deduction.

The maximum amount of the tuition and fees deduction you can claim is $4,000 per year. The deduction is further limited by income ranges:
  • $4,000 max for income up to $65,000 ($130,000 for joint filers)
  • $2,000 max for income over $65,000 up to $80,000 ($160,000 for joint filers)
  • no deduction for income over $80,000 ($160,000 for joint filers).
The deduction is available for any person who paid tuition and other required fees for attending college, university, or other post-secondary school. The deduction is available for a parent whose dependent attends college, but only if the parent qualifies for claiming the student as a dependent.

Claiming the child as a dependent
YES, you can claim the as your dependent without Form 8332, IF you meet the qualifying conditions.

Form 8332 is needed in order for the right to claim the dependent child tax exemption to be transferred from the custodial parent to the noncustodial parent. This assumes, however, that the child has been in the custody of the parents for more than half of the year.

In most states (including Texas), upon attaining age 18 a child is deemed as being emancipated automatically by operation of law and is from that point forward no longer in the legal custody of either parent. Consequently, much depends on exactly WHEN it was that the child attained age 18 (and thus became emancipated as a matter of law).

If the child was age 18 when the year began or attained age 18 prior to June 30 of the tax year in question, the child would NOT be in the custody of either parent for more than half of the year, so the “custody” rule otherwise applicable to determining the entitlement to claim the dependent child tax exemption as between divorced parents, separated parents, and never-married parents would have no application (so far is the IRS is concerned), and Form 8332 would not be needed. Instead, the entitlement to claim the child as a dependent would be determined by application of the “regular rules” for claiming an exemption for a “qualifying child” or a “qualifying relative,” whichever situation may be applicable.

EXAMPLE (courtesy of the IRS): When your son turned age 18 in May 2009, he became emancipated under the law of the state where he lives. As a result, he is not considered in the custody of his parents for more than half of the year. The special rule for children of divorced or separated parents does not apply.

If the child did not attain age 18 until on or after July 1, 2009 (for example), the special rule for children of divorced or separated parents would apply and the parent with whom the child lived for the greater number of nights in 2009 prior to attaining age 18 would be treated as the custodial parent and thus be entitled to claim the exemption unless the exemption is transferred to the other parent (the noncustodial parent) via Form 8332.

More info at IRS Publication 501:
http://www.irs.gov/publications/p501/ar02.html#en_US_publink1000220868

See also:
http://ldgorin.justia.net/article_27-1503896.html

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Customer: replied 4 years ago.

Thank you Mr. Gorin for a much more thorough response.

 

Afte reading the IRS material referenced, it is my understanding that since the child turned 18 in September of 2009, that for the tax year of 2010 (when he starts college) in order for me (the historical non-custodial parent, to claim the child as a dependent, he would have to spend more nights with me than with his mom. This will not be the case, and he will also spend significant times at school since he is boarding there. All this being the case, it sounds like I need form 8332 completed by the custodial parent after all, since he will spend more nights with his mom than with me, when he is not at school. THANKS.

Expert:  Lawrence D. Gorin replied 4 years ago.
FURTHER ANSWER:
Let me try to make this clear once again: The “special IRS rule for children of divorced or separated parents” does NOT apply to situations in which the child is NOT in the “custody” of one or both parents for more the half of the tax year.

To be more specific: For a child who, for more than one-half of the year, is in the custody of one or both divorced or legally separated parents, who live apart at all times during the last six months of the year and who together provide over one-half the child’s total support during the calendar year, the parent having “custody” (as defined by IRS law) for the greater portion of the year is deemed as the child’s “custodial parent” and on that basis will generally have the exclusive right to claim the dependent child tax exemption. This rule also applies to married parents who live apart at all times during the last six months of the year, as well as to never-married parents who live apart at all times during the last six months of the year, so long as such parents together provide over one-half the child’s total support during the calendar year. If this “special rule” applies, the parent having custody for the greater portion of the year is treated as the child’s “custodial parent” and n that basis will generally have the exclusive right to claim the dependent child tax exemption. However, in such case, the custodial parent may waive and release the right to claim the exemption, pursuant to procedures spelled out in the applicable law and federal regulations, thereby allowing the exemption to be claimed by the parent who had custody for the lesser portion of the year, i.e., the “noncustodial parent.”

HOWEVER, the concept of “custody” for purposes of the application of the “special IRS rule for children of divorced or separated parents” does NOT apply to a child who is “emancipated” under the law of the state in which the child resides. In most states, a child is “emancipated” automatically, by operation of law, upon attaining age 18. From the time forward, the child is NOT in the “custody” of either parent. In sum, there is no longer a “custodial” parent nor a “noncustodial” parent. The special IRS dependent child tax rule based on which parent has “custody” (and which parent is the “custodial parent”) simply DOES NOT APPLY. No need to “count the nights,” etc.

In your case, for the tax year 2009, the child was not emancipated until attaining age 18 in September 2009. Therefore, the special IRS rule for claiming the dependent child tax exemption for divorced and separated parents DOES apply for the year 2009. Which parent under this rule is entitled to claim the tax exemption for the child depends on which parent was the “custodial parent” for the greater portion of time up to the child’s attaining age 18 in Sept 2009. This is determined by the number of overnights the child spent with each parent prior to the child’s attaining age 18. For IRS purposes, the particular parent with whom the child spent the greater number of overnights from Jan 1, 2009, to the 18th birthday in Sept 2009 will be treated as the “custodial parent” for 2009.

For 2010, the special IRS dependent child tax rule based on which parent has “custody” (and which parent is the “custodial parent”) will NOT apply. Simply put, the child is NOT in the custody of either parent. The entire legal concept of “custody” simply DOES NOT APPLY. No need to “count the nights,” etc. And the use of IRS Form 8332 has no function or purpose. Further, which parent historically was or was not the custodial parent has absolutely no bearing or relevance.

For the year 2010, you can claim the child (now an adult and in nobody’s custody) as your dependent if the child qualifies as your “QUALIFYING CHILD” under the applicable IRS rules. And if the person so qualifies, you can claim the dependent exemption (and there is no need to deal with IRS Form 8332).

To be a “QUALIFYING CHILD,” there are six tests that must be met. The six tests are:
  • Relationship test;
  • Age test;
  • Residency test;
  • Support test;
  • Joint return test; and
  • Special test for qualifying child of more than one person.

The age test in your case will be satisfied if the child at the end of the year is under age 24 AND a full-time student.

The “support test” for “qualifying child” purposes is met if the child does not provide more than half of his/her own support.

The residency test in your case will be satisfied if the child lived with you for more than half of the year. From the facts you are presenting, it would appear that this test will NOT be met for you for 2010.

So for the year 2010, the child will not be your “qualifying child.” Rather, it appears that the child will be the “qualifying child” of your ex-wife, assuming she satisfies each of the six applicable “tests.” And if that is the case, she gets to claim the exemption (and you do not).

Further, since the “special rule for children of divorced or separated parents” does NOT apply in your case for 2010 (and subsequent years), since the child is emancipated, your ex-wife’s right to claim the dependent exemption based on the child being her “qualifying child” is absolute and not subject to being transferred to your. Again, in this situation, IRS Form 8332 has no application.

NOTE: As a practical matter, if the child qualifies as the “qualifying child” for your ex-wife (and thereby does not qualify as a “qualifying child” for you), you would nonetheless be safe in claiming the exemption on your tax return if your ex-wife opts to not claim the exemption on her tax return. No IRS form 8332 is needed. Just the informal agreement of the two of you, coupled with your ex-wife keeping her end of the agreement. As a practical matter, so long as the exemption is claimed by only ONE taxpayer (and not by more than one), IRS really does not care and will not question the exemption claim.

OK. I hope this clarifies. Time for you to click the ACCEPT button (if not already done) so I can get paid for the information given and time expended in responding to your inquiry.
Lawrence D. Gorin, Tax Attorney
Category: Tax
Satisfied Customers: 1505
Experience: 30+ years of legal experience. Special emphasis in divorce & family tax matters.
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