Dependency Exemptions in Massachusetts
Dependency exemptions for the children are allocated between the parties by the court, and it depends on the relative income of both parties. If there is a situation where one party would be “wasting” the exemption, that means it has no beneficial impact on the amount of taxes that they have to pay; then the other party will typically get the exemption. If both parties benefit from the exemption and there is, for instance, one child; the general rule of thumb is that child’s dependency exemption would get alternated. If there are more than one child or two children, then they would be split, as long as both parents have a need and a use for the dependency exemption. If there are three children, it might get to be two children, one year for one parent, one child for the other parent and then reverse the following year. In any case, an IRS Form, “form 8332” needs to be filled-out to release the dependency exemption to the other parent, and that generally gets filed with the tax return.