Appleman Re: Custodial Parent......

[RayT]

Your Response:
It is the custodial parent who must execute Form 8332 and provide it for the non-custodial parent to attach to his return. This entitles the non-custodial parent to the dependent deduction and the child tax credit, as well as access to educational tax credits and tuition & fees deduction. Only the parent claiming the deduction is eligible for education credits and the T&F deduction for amounts that he paid. If the parent who does not claim the deduction makes payments directly to the qualified institution on behalf of the student, those payments are considered paid by the student, and the parent claiming the deduction may use these amounts to figure education credits or T&F deduction. So for educational benefits, custody really isn't involved. Evan Appelman, EA
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My Question: The 18-y.o. child lives full-time with the custodial parent and she qualifies as HOH. The parents alternate the dependency/exemption every other year. The question is: Can the custodial parent take the education credit (college tuition) in those years she does not have the dependency/exemption? Or, does the non-custodial parent have to relinquish the dependency/exemption to her for those years, in order for her to qualify for the education credit, by filing Form 8332 with his returns? This assumes she actually pays the tuition for those years.

[S T]

My understanding to your posts is that the Taxpayer in order to claim any Education Credits must be claiming the "student/child" dependent exemption on the Tax Return,

regardless of who paid for the Education Credits, Taxpayer, non-custodial, grand parents, others

See TTB starting at Section 12, and also Publication 970

Eligible Students
The student must be the taxpayer, spouse, or a dependent for
whom the taxpayer claims an exemption.

Hope this helps,

Sandy

[DonPriebe]

You have already gotten the answer - let me try to reword it ...

...My Question: The 18-y.o. child lives full-time with the custodial parent and she qualifies as HOH. The parents alternate the dependency/exemption every other year. The question is: Can the custodial parent take the education credit (college tuition) in those years she does not have the dependency/exemption?

No. Only the parent who is claiming the child as a dependent can claim the educational benefits.

... or, does the non-custodial parent have to relinquish the dependency/exemption to her for those years, in order for her to qualify for the education credit, by filing Form 8332 with his returns? This assumes she actually pays the tuition for those years.

The non-custodial parent has no inherent dependency claim that he can relinquish. The practice of alternating the dependency between the two parents might have been established by the divorce decree or by agreement between the two parties, but it is not binding on the IRS for future years. [Exception - if the custodial parent previously signed a 8332 for all alternate future years, she can now file a 8332 revoking the previous 8332 if she wishes.] As far as the IRS is concerned, which parent claimes the child as a dependent is strictly a choice made by the custodial parent each year.

If she (the custodial parent) wishes to claim the dependency and educational benefits for a paticular year, it is her right. No special forms are required from the non-custodial parent allowing her to do so.

[Gary2]

Note that an 8332 revocation must be sent to the non-custodial parent, doesn't take effect until the year after (i.e., one sent now would first apply to tax year 2013), and must be attached to the custodial parent's return.

If the divorce decree assigns the dependency to the non-custodial parent, and that parent agrees to relinquish it, then it is often advisable for the custodial parent to get that release in writing. This isn't for the IRS, but for the protection of the custodial parent in case the other parent has a change of heart and tries to get the state court to enforce the decree.

[DonPriebe]

Note that an 8332 revocation must be sent to the non-custodial parent, doesn't take effect until the year after (i.e., one sent now would first apply to tax year 2013), and must be attached to the custodial parent's return.

Nope. It's attached to the non-custodial parent's return, i.e. to the parent claiming the child for that year. See the instructions on the form.

[Gary2]

Nope. It's attached to the non-custodial parent's return, i.e. to the parent claiming the child for that year. See the instructions on the form.

I'll see your nope, and raise you.

The common case is for the noncustodial parent to file it. But when the custodial parent has previously signed an 8332 to release the exemption for multiple years, provided it to the noncustodial parent (who presumably filed it at least once), and then subsequently chooses to revoke the exemption, then it is the custodial parent who must file the revoking 8332 with his or her return. After all, why would the non-custodial parent want to file a return that says "here's proof I can't claim my child"?

In other words, the last part of your first sentence is correct, it goes with the return claiming the exemption. The instructions in the section on revocation cover this.