8520 / Who is entitled to the dependency exemption for qualifying children when the parents are divorced or have never been married?
For purposes of determining if a parent is entitled to the dependency exemption for qualifying children, it makes no difference whether the parents were divorced or had never been married.1 As a general rule, the custodial parent is entitled to claim the dependency exemption. According to the Code, the parent having custody for the greater portion of the year is considered to be the “custodial parent.”2 However, if both parents have custody for equal amounts of time during the taxable year, the parent with the highest adjusted gross income is entitled to claim the exemption.3
On the other hand, the custodial parent may release the claim for exemption to allow the noncustodial parent to claim the exemption. In order to release the claim for exemption, the custodial spouse executes a Form 8332 that the noncustodial parent must attach to the tax return. As explained below, it is also possible for the custodial spouse to revoke the release of the exemption in order to claim it for himself or herself.