After a divorce, the parent who may claim a child on a federal tax return is decided by federal law. The default is the custodial parent, meaning the parent the child lived with for more nights during the year. The other parent can claim the child only if the custodial parent signs a written release, normally IRS Form 8332 (26 U.S.C. § 152(e); IRS Publication 504). A Montana decree can require parents to cooperate on this, but it does not change what the IRS will accept. This page is part of our Montana Divorce Guide. It is general information, not tax advice, and you should confirm your own return with a tax professional.
The Federal Custodial-Parent Rule
Section 152(e) of the Internal Revenue Code has a special rule for parents who are divorced, legally separated, separated under a written agreement, or living apart at all times during the last six months of the year. If the child receives over half of the child's support from the parents and is in the custody of one or both for more than half the year, the child is treated as the qualifying child of the noncustodial parent only if the custodial parent signs a written declaration that the custodial parent will not claim the child, and the noncustodial parent attaches it to the return.
Without that declaration, the general rule applies and the claim stays with the custodial parent. The statute defines the custodial parent as "the parent having custody for the greater portion of the calendar year."
Federal tax law still uses the word custody. Montana family law uses parenting plan and residential schedule instead. The two do not always line up.
How the IRS Counts Nights
IRS Publication 504 turns the statute into a counting rule. The custodial parent "is the parent with whom the child lived for the greater number of nights during the year." A child is treated as living with a parent for a night if the child sleeps at that parent's home, whether or not the parent is present, or in the parent's company elsewhere, such as on vacation.
- Equal nights: the custodial parent is the parent with the higher adjusted gross income.
- Night away from both: a night at a friend's house is counted for the parent the child normally would have been with.
- Night-shift parent: if a child lives more days than nights with a parent who works nights, that parent is treated as the custodial parent.
- Year of separation: if the child lived with both parents before the separation, only the nights in the rest of the year are compared.
Note that this is a different count from the one used for child support. The Montana guidelines count days, defined as the majority of a 24-hour period (ARM 37.62.124(3)). See parenting time and child support.
Form 8332: Releasing the Claim
The custodial parent releases the claim by signing Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent, or a similar statement containing the same information. According to Publication 504:
- the release can be for one year, for specified years such as alternate years, or for all future years;
- the noncustodial parent must attach a copy to the return each year the claim is released;
- for a decree or agreement that took effect after 2008, pages from the decree cannot be used in place of the form, and the release must be without conditions; and
- the custodial parent can revoke a release by written notice, which takes effect no earlier than the tax year after the year the notice is given.
Publication 504 for tax year 2025 notes that the personal exemption amount is zero, but the release still matters because it determines who can claim the credits tied to the child.
What the Release Does and Does Not Transfer
| Tax benefit | Moves to the noncustodial parent with Form 8332? |
|---|---|
| Child tax credit, additional child tax credit, credit for other dependents | Yes. The release lets the noncustodial parent claim these, if otherwise eligible. |
| Head of household filing status | No. Stays with the custodial parent, if eligible. |
| Credit for child and dependent care expenses | No. Stays with the custodial parent, if eligible. |
| Exclusion for dependent care benefits | No. Stays with the custodial parent, if eligible. |
| Earned income credit | No. Stays with the custodial parent, if eligible. |
Source: IRS Publication 504, "Written declaration" and "Applying the tiebreaker rules to divorced or separated parents." Each parent still has to meet the ordinary requirements for any benefit claimed.
What a Montana Decree Can and Cannot Do
Montana's child support statute and guidelines do not say which parent claims the child. Parents can address it in the parenting plan or the settlement agreement, for example by alternating years or assigning one child to each parent, and the terms become part of the decree.
A decree works on the parents, not on the IRS. It can require the custodial parent to sign Form 8332 for the years agreed, and a parent who does not follow the decree can be brought back to the state court. What the decree cannot do is substitute for the form, or make the IRS treat a parent as the custodial parent when the night count says otherwise. A workable provision therefore says who signs the form, for which years, and by what date.
Releases under post-2008 instruments must be unconditional on the federal side. If parents want a release to depend on support being current, that condition belongs in the decree as a matter between them, and a lawyer and a tax professional should both look at the wording.
How Taxes Feed Into the Support Calculation
The tax claim and the support number are connected. The guidelines deduct each parent's actual income tax liability from income (ARM 37.62.110(1)(d)), and child care costs are reduced by the federal dependent care tax credit before they are shared (ARM 37.62.123(1)(a)). A change in who claims a child changes a parent's tax liability, which can change the worksheet. It makes sense to settle the tax provision before the final calculation is run. See how child support is calculated.
Child support itself has no tax effect: it is not deductible by the payer and not taxable to the recipient (IRS Publication 504). Maintenance is treated differently, as explained in maintenance and taxes. For filing status and other issues in the year of the decree, see taxes the year you divorce. A&M Law does not prepare tax returns or give tax advice, and we encourage clients to involve a tax professional before signing.
This page explains federal tax rules as described in 26 U.S.C. § 152(e) and IRS Publication 504 for tax year 2025, and Montana law as of the 2025 Montana Code Annotated. It is not legal or tax advice about your specific case.