Quick Answer
Form 8332 allows the custodial parent to release the dependency exemption and child tax credit ($2,000 per child) to the non-custodial parent. However, it doesn't transfer head of household status, earned income tax credit, or child care credit.
Best Answer
Robert Kim, CPA
Best for divorced parents following court orders that assign tax exemptions
Form 8332 transfers specific tax benefits to non-custodial parents
Form 8332 (Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent) allows the parent with majority custody to give certain tax benefits to the non-custodial parent. According to IRS Publication 501, this form only transfers specific benefits — not all child-related tax advantages.
What Form 8332 transfers
When the custodial parent signs Form 8332, the non-custodial parent can claim:
What Form 8332 does NOT transfer
The custodial parent keeps these benefits even after signing Form 8332:
Example: $60,000 custodial vs $90,000 non-custodial parent
Lisa (custodial parent, $60,000 AGI) and Tom (non-custodial parent, $90,000 AGI) have a 12-year-old daughter.
Without Form 8332 (Lisa claims daughter):
With Form 8332 (Tom claims daughter):
Tax savings breakdown:
When Form 8332 makes sense
How to complete Form 8332
The custodial parent must:
1. Complete Part I: Check the years the release applies (can be specific years or all future years)
2. List each child: Include names and Social Security numbers
3. Sign and date: Must be signed by the custodial parent
4. Provide to non-custodial parent: Give original or certified copy
The non-custodial parent attaches Form 8332 to their tax return each year they claim the exemption.
Revoking Form 8332
The custodial parent can revoke the release by:
1. Filing Form 8332 Part II (Revocation)
2. Providing written notice to the non-custodial parent by January 1st of the tax year
3. The revocation takes effect for that tax year and all future years
Common mistakes to avoid
What you should do
1. Calculate both scenarios: Use our refund estimator to compare tax benefits with and without Form 8332
2. Review your divorce decree: Check if it already assigns tax exemptions
3. Consider income changes: What happens if income levels change in future years?
4. Negotiate fairly: Consider having the parent getting the credit share some benefit
Form 8332 can save hundreds or thousands in combined family taxes, but only if used strategically.
Key takeaway: Form 8332 transfers the $2,000 child tax credit and dependency deduction to the non-custodial parent, but the custodial parent keeps head of household status and earned income tax credit benefits.
*Sources: [IRS Publication 501](https://www.irs.gov/pub/irs-pdf/p501.pdf), [Form 8332 Instructions](https://www.irs.gov/pub/irs-pdf/i8332.pdf)*
Key Takeaway: Form 8332 transfers the $2,000 child tax credit and dependency exemption to the non-custodial parent, but the custodial parent keeps head of household status and earned income tax credit.
What Form 8332 transfers vs. what stays with custodial parent
| Tax Benefit | Transfers to Non-Custodial | Stays with Custodial | 2026 Value |
|---|---|---|---|
| Child tax credit | ✓ | $2,000 per child | |
| Dependency deduction | ✓ | $2,000 income reduction | |
| Head of household status | ✓ | ~$1,200 value | |
| Earned income tax credit | ✓ | Up to $3,500+ with kids | |
| Child care credit | ✓ | Up to $2,100 | |
| Education credits | ✓ | Up to $2,500 |
More Perspectives
Diana Flores, EA
Best for recently divorced parents navigating tax implications for the first time
Understanding Form 8332 as a newly divorced parent
If you're newly divorced, Form 8332 might be mentioned in your divorce decree or settlement agreement. This form allows you to transfer certain tax benefits for your children, but it's important to understand what you're giving up and what you're keeping.
First-time filer considerations
Many divorce agreements include language about tax exemptions without fully explaining the financial impact. Before signing Form 8332:
Example for a newly divorced parent
Sarah just divorced and has primary custody of her 10-year-old son. Her ex-husband's lawyer is requesting Form 8332.
Sarah's situation:
If Sarah signs Form 8332:
Negotiation opportunity: Sarah could ask her ex-husband to share the $2,000 tax benefit since she's providing primary care.
Don't feel pressured to sign Form 8332 just because it's requested. Understand the financial impact first.
Key Takeaway: As a newly divorced parent, understand that Form 8332 gives away valuable tax credits, so calculate the impact and consider negotiating compensation.
Robert Kim, CPA
Best for non-custodial parents who pay child support and want to claim tax benefits
Using Form 8332 when you pay child support
As a non-custodial parent paying child support, you might feel entitled to tax benefits since you're financially supporting your child. Form 8332 can help align tax benefits with financial responsibility.
Building your case for Form 8332
When requesting Form 8332 from your ex-spouse:
Example: Non-custodial parent strategy
Mike pays $1,200/month ($14,400/year) in child support and earns $85,000. His ex-wife earns $40,000.
Mike's potential benefit with Form 8332:
Negotiation approach: Mike offers to pay an extra $100/month in child support in exchange for Form 8332, giving his ex-wife $1,200 while he saves $1,240 in taxes.
Result: Win-win arrangement where both parents benefit financially.
Remember, you need Form 8332 to claim these benefits — paying child support alone doesn't give you tax exemptions.
Key Takeaway: Non-custodial parents paying child support can use Form 8332 to claim tax benefits, often making it worth sharing some of the tax savings with the custodial parent.
Sources
- IRS Publication 501 — Dependents, Standard Deduction, and Filing Information
- Form 8332 Instructions — Release/Revocation of Release of Claim to Exemption for Child
Related Questions
Reviewed by Robert Kim, CPA on February 28, 2026
This content is for educational purposes only and is not a substitute for professional tax advice. Consult a qualified tax professional for advice specific to your situation.