Personal Finance
Tax Q&A: Child custody
April 10, 2001: 6:24 p.m. ET

If you have joint custody of a child, which parent gets to claim what?
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NEW YORK (CNNfn) - Have joint custody of a child, work outside the U.S. or haven't filed because you are sure the government owes you money? These are just some of the details that can come to haunt you at tax time. There is a good chance that at some point you may be faced with one of these exact situations. Would you know what to do?

Got questions about filing your return? Here's your chance for some free advice. CNNfn has organized a panel of outside experts to answer your questions throughout the filing season. Send your questions to: Not all questions can be answered and any information you provide may be used by one or more AOL Time Warner properties. Today's answers are provided by a team of tax professionals at CCH Inc., a Riverwoods, Ill.-based tax and business law information firm.

Question: My ex-wife and I, in our 1999 divorce decree, agreed to alternately claiming our 10-year-old son as a dependent deduction every other year. I claimed him last year, 1999 tax return, under the first year of this arrangement. -- Mark

Answer: Generally, the dependency exemption belongs to the parent who has custody of the child for the greater part of the year. However, the custodial parent may release the right to the child's exemption to the non-custodial parent in a divorce decree.

The custodial parent may use either Form 8332 or a similar statement to make the written declaration to release the exemption to the non-custodial parent. If the divorce decree states that the non-custodial parent can claim the child as a dependent without regard to any condition, such as payment of support, the non-custodial parent can attach a copy of the following pages from the decree instead of Form 8332.

1) Cover page (write the other parent's Social Security number on this page).

2) The page that states you can claim the child as your dependent.

3) Signature page with the other parent's signature and the date of the agreement

Question: My brother has not filed taxes for three 3 years. Can he claim now for those years? And if so, will he be penalized? unnamed

Answer: It is not clear why your brother did not file. Persons are required to file returns if they earn a minimum amount of income. The minimum amount varies each year and depends on filing status. For example, the minimum amount for a single person in tax year 2000 is $7,200. Therefore, your brother may not have been required to file a return for those years.

If he was required to file and did not, civil or criminal liabilities may be applicable if there is any tax due.

If your brother files and pays any tax due, it will be a late return but stop additional interest on the underpayment.

If he overpaid taxes (e.g. more money was withheld than tax due), he can file for a refund. However, since no return was filed, the refund claim must be filed within 2 years from the time the tax was paid.

Question: I would like to ask what are the tax policies for U.S. residents who don't have earnings within the United States. Do I still need to file Income Tax Returns? Also, I'd like to know the Tax Schedule (i.e. % tax for x income level). Albert

Answer: Albert, I really don't have enough information to give you much of an answer.

The tests on whether an individual is considered a "U.S. resident" for tax purposes can be rather complex

If you qualify as a "U.S. resident" you would be taxed on worldwide income. So any income from outside of the United States must be reported.

Special rules apply if you worked abroad, and have foreign earned income. Such earned income could be excluded if certain tests are met.

I would suggest obtaining IRS Publication 54 -- Tax Guide for U.S. Citizens and Resident Aliens Abroad. If you have access to the Internet, here is the IRS publication Web site: graphic