Unless a
marital settlement agreement or divorce judgment provides otherwise, the parent who has physical custody is entitled
to claim the children as dependents on his or her income tax returns. However, many marital agreements and divorce
judgments specifically provide that the payor (noncustodial) parent is entitled
to claim the children as dependents, or that the parties will each claim one
child.
Under New
York law, it is well established that where a noncustodial parent meets all or
a substantial part of a child’s financial needs, a court may determine that the
noncustodial parent is entitled to declare the child as a dependent. See,
e.g., O’Halloran v. O’Halloran,
873 N.Y.S.2d 87 (2nd Dept. 2009).
If parties
are entering into a separation agreement that provides for the noncustodial
parent to claim the children as dependents, they should specify that the
custodial parent will execute an IRS Form 8332 or a similar statement, which
serves to release the custodial parent's claim to an exemption for a
child. The noncustodial parent must
attach a copy of that release form to his or her return. The form or statement
must release the custodial parent's claim to the child without any conditions.
For example, the release must not depend on the noncustodial parent paying
support.
Equitable Distribution: Recent NY Decisions
November 17, 2011
