Tax laws governing divorced taxpayers are complex, but a few simple rules can help you accurately prepare your tax return. The Internal Revenue Service (IRS) considers only one parent to be the custodial parent of a dependent. However, the custodial parent can allow the noncustodial parent to claim the dependent on tax Form 1040. Only a custodial parent can file as head of household.
The only way the IRS allows divorced parents to split dependents is if one dependent lives with one parent more than 50 percent of the time, and another dependent lives with the other parent more than 50 percent of the time. In that case, each parent is considered a custodial parent of a dependent. In most cases, parents try to keep siblings together, so the custodial parent claims the children as dependents on Form 1040.
As the custodial parent, you are responsible for the primary care of your dependents. You can receive alimony and child support and retain your legal right as the custodial parent. The IRS allows you to claim each dependent as an exemption on your federal tax return as long as your children live with you more than half of the year.
File Head of Household
Only a custodial parent can file as head of household on her federal tax return. Unless each parent has primary custody of a different child, only the custodial parent can file as head of household. In most divorce cases, only one parent files as head of household and the other parent files as a single.
According to the IRS, a custodial parent can file Form 8332, which gives a noncustodial parent permission to claim a dependent on his federal return for that particular year. Form 8332 is the Release/Revocation of Release of Claim to Exemption for Child of Divorced or Separated Parents. If the noncustodial parent claims the child on his federal return, the custodial parent cannot claim the child. The noncustodial parent cannot claim head of household because the dependent still lives with the custodial parent more than 50 percent of the year.