Form 8332 (Release of claim to exemption)

[MRPLOW]

I have a client who's children do not live with him. Per divorce decree he gets to claim them as dependents. Ex-wife signs form 8332 and gives it to him.

My question is... He is now remarried and due to child tax credit income limits he and his wife will save over $3000 by doing married filing separate. But this would require his current wife to claim the kids in question on her MFS tax return. Is this ok?

[Possi]

I don't see how

I do not see how that could possibly be ok since the 8332 gives the exemption specifically to the noncustodial parent.

[Burke]

I agree. The exemption will have to be foregone if this is what he wants to do. He can't give it to his new wife. But he could let his "old" wife take them.

[MRPLOW]

But new step-mom is a non-custodial parent. She is the child's legal step-mom.

[MRPLOW]

What if ex-wife signs over the dependency on the Form 8332 to the new step-mom?

Remember a step-parent or an ex step-parent is treated just like a biological parent all other dependency rules.

[ddoshan]

Interesting twist to the situation. Somehow though it does not seem kosher or at the very least I would think the wife would have to sign over to the husbands new wife. I can't just see him passing this along.

Call the IRS and drive them nuts with the question.