Multiple Support Agreement

Sometimes no one provides more than half of the support of a person. Instead, two or more persons, each of whom would be able to take the exemption but for the support test, together provide more than half of the person's support.

When this happens, you can agree that any one of you who individually provides more than 10% of the person's support, but only one, can claim an exemption for that person. Each of the others must sign a statement agreeing not to claim the exemption for that year. The person who claims the exemption must keep these signed statements for his or her records. A multiple support declaration identifying each of the others who agreed not to claim the exemption must be attached to the return of the person claiming the exemption. Form 2120, Multiple Support Declaration, can be used for this purpose.

Example 1.   You, your sister, and your two brothers provide the entire support of your mother for the year. You provide 45%, your sister 35%, and your two brothers each provide 10%. Either you or your sister can claim an exemption for your mother. The other must sign a statement agreeing not to take an exemption for your mother. The one who claims the exemption must attach a Form 2120 or similar declaration to his or her return and must keep for his or her records the signed statement from the one agreeing not to take the exemption. Because neither brother provides more than 10% of the support, neither can take the exemption. Your brothers do not have to sign a statement.

Example 2.   You and your brother each provide 20% of your mother's support for the year. The remaining 60% of her support is provided equally by two persons who are not related to her. She does not live with them. Because more than half of her support is provided by persons who cannot claim an exemption for her, no one can take the exemption.

Example 3.   Your father lives with you and receives 25% of his support from social security, 40% from you, 24% from his brother, and 11% from a friend. Either you or your uncle can take the exemption for your father if the other signs a statement agreeing not to. The one who takes the exemption must attach a Form 2120 or a similar declaration to his return and must keep for his records the signed statement from the one agreeing not to take the exemption.

Support Test for Child of Divorced or Separated Parents

The support test for a child of divorced or separated parents is based on the special rules explained here and shown in Figure 3-B. However, these special rules apply only if all of the following are true.

1. The parents are divorced or legally separated under a decree of divorce or separate maintenance, or separated under a written separation agreement, or lived apart at all times during the last 6 months of the calendar year.
2. One or both parents provide more than half of the child's total support for the calendar year.
3. One or both parents have custody of the child for more than half of the calendar year.

Child is defined earlier under Gross Income Test.

This discussion does not apply if the support of the child is determined under a multiple support agreement, discussed earlier.

General rule.   The parent who has custody of the child for the greater part of the year (the custodial parent) is generally treated as the parent who provides more than half of the child's support. It does not matter whether the custodial parent actually provided more than half of the support.

Custody.   Custody is usually determined by the terms of the most recent decree of divorce or separate maintenance, or a later custody decree. If there is no decree, use the written separation agreement. If neither a decree nor agreement establishes custody, then the parent who has the physical custody of the child for the greater part of the year is considered to have custody of the child. This also applies if the validity of a decree or agreement awarding custody is uncertain because of legal proceedings pending on the last day of the calendar year.

If the parents are divorced or separated during the year and had joint custody of the child before the separation, the parent who has custody for the greater part of the rest of the year is considered to have custody of the child for the tax year.

Example 1.   Under the terms of your divorce, you have custody of your child for 10 months of the year. Your former spouse has custody for the other 2 months. You and your former spouse provide the child's total support. You are considered to have provided more than half of the support of the child. However, see Exception, later.

Example 2.   You and your former spouse provided your child's total support for 2002. For the first 8 months of the year, you had custody of your child under your 1994 divorce decree (the most recent decree at the time). On August 31, 2002, a new custody decree granted custody to your former spouse. Because you had custody for the greater part of the year, you are considered to have provided more than half of your child's support, unless the exception described next applies.

Exception.   The noncustodial parent will be treated as providing more than half of the child's support if:

1. The custodial parent signs a written declaration that he or she will not claim the exemption for the child, and the noncustodial parent attaches this written declaration to his or her return,
2. The custodial parent signed a decree or agreement executed after 1984 that states he or she will not claim the exemption for the child, and that the noncustodial parent can claim an exemption for the child without regard to any condition, such as payment of support, and the noncustodial parent attaches to his or her return the documentation described later under Divorce decree or separation agreement made after 1984, or
3. A decree or agreement executed before 1985 provides that the noncustodial parent is entitled to the exemption, and he or she provides at least $600 for the child's support during the year, unless the pre-1985 decree or agreement is modified after 1984 to specify that this provision will not apply.

Noncustodial parent.   The noncustodial parent is the parent who has custody of the child for the shorter part of the year or who does not have custody at all.

Example.   Under the terms of your 1984 divorce decree, your former spouse has custody of your child. The decree specifically states that you are entitled to the exemption. You provide at least $600 in child support during the calendar year. You are considered to have provided more than half of the child's support.

Written declaration.   The custodial parent may use either Form 8332 or a similar statement (containing the same information required by the form) to make the written declaration to release the exemption to the noncustodial parent. The noncustodial parent must attach the form or statement to his or her tax return.

The exemption can be released for a single year, for a number of specified years (for example, alternate years), or for all future years, as specified in the declaration. If the exemption is released for more than one year, the original release must be attached to the return of the noncustodial parent for the first year of such release, and a copy must be attached for each later year.

Divorce decree or separation agreement made after 1984.   If your divorce decree or separation agreement was executed after 1984, the noncustodial parent does not have to attach Form 8332 if both of the following requirements are met.

1. The decree or agreement is signed by the custodial parent and states all of the following.
   1. The custodial parent will not claim the child as a dependent for the year.
   2. The noncustodial parent can claim the child as a dependent without regard to any condition, such as payment of support.
   3. The years for which the noncustodial parent, rather than the custodial parent, can claim the child as a dependent.
2. The noncustodial parent attaches a copy of the following pages of the decree or agreement to his or her tax return.
   1. The cover page (write the other parent's social security number on this page).
   2. The pages that contain the information shown in item (1).
   3. The signature page with the other parent's signature and the date of the agreement.

If these requirements are not met, the noncustodial parent must attach to his or her return Form 8332 or a similar statement from the custodial parent releasing the exemption.

Figure 3-B. Support Test for Children of Divorced or Separated Parents

Child support.   All child support payments actually received from the noncustodial parent are considered used for the support of the child.

Example.   The noncustodial parent provides $1,200 for the child's support. This amount is considered support provided by the noncustodial parent even if the $1,200 was actually spent on things other than support.

Paid in a later year.   If you fail to pay child support in the year it is due, but pay it in a later year, your payment of the overdue amount is not considered paid for the support of your child, either for the year the payment was due or for the year it is paid. It is payment of an amount you owed to the custodial parent, but it is not considered paid by you for the support of your child.

Example.   You owed but failed to pay child support last year. This year, you pay all of the amount owed from last year and the full amount due for this year. Your payment of this year's child support counts as your support for this year, but your payment of the amount owed from last year does not count as support either for this year or for last year.

Third-party support.   Support provided by a third party for a divorced or separated parent is not included as support provided by that parent. However, see Remarried parent, later.

Example.   You are divorced. During the entire year, you and your child live with your mother in a house she owns. The fair rental value of the lodging provided by your mother for your child is $3,000. The home provided by your mother is not included in the amount of support you provide.

Remarried parent.   If you remarry, the support provided by your new spouse is treated as provided by you.

Example.   You have two children from a former marriage who live with you. You have remarried and are living in a home owned by your new spouse. The fair rental value of the home provided to the children by your new spouse is treated as provided by you.

Home jointly owned.   If you and your former spouse have the right to use and live in the home, each of you is considered to provide half of your child's lodging. However, if the divorce decree gives only you the right to use and live in the home, you are considered to provide your child's entire lodging. It does not matter if the legal title to the home remains in the names of both parents.

Parents who never married.   These special rules for divorced or separated parents do not apply to parents who never married each other. If this is your situation, you must provide more than half the support of your child or enter into a multiple support agreement, as discussed earlier, to satisfy the support test.

Example.   You never married the father of your child and do not live with him, but he provides the home you and your child live in. The fair rental value of the lodging he provides to your child is $3,000 a year. You provide the rest of your child's support for the year, which is $1,200. The special rules for a child of divorced or separated parents do not apply because you and the child's father never married. As a result, you cannot claim an exemption for your child because you did not provide more than half of the child's support.

Phaseout of Exemptions

The amount you can claim as a deduction for exemptions is phased out once your adjusted gross income (AGI) goes above a certain level for your filing status. These levels are as follows:

Filing Status	AGI Level Which Reduces Exemption Amount
Married filing separately	$103,000
Single	137,300
Head of household	171,650
Married filing jointly	206,000
Qualifying widow(er)	206,000

If your AGI exceeds the level for your filing status, use the Deduction for Exemptions Worksheet in the instructions for Form 1040 to figure the amount of your deduction for exemptions.

You must reduce the dollar amount of your exemptions by 2% for each $2,500, or part of $2,500 ($1,250 if you are married filing separately), that your AGI exceeds the amount shown above for your filing status. If your AGI exceeds the amount shown by more than $122,500 ($61,250 if married filing separately), the amount of your deduction for exemptions is reduced to zero.

Social Security Numbers for Dependents

You must list the social security number (SSN) of any person for whom you claim an exemption in column (2) of line 6c of your Form 1040 or Form 1040A.

If you do not list the dependent's SSN when required or if you list an incorrect SSN, the exemption may be disallowed.

Note.   If your dependent does not have and cannot get an SSN, you must list the individual taxpayer identification number (ITIN) or adoption taxpayer identification number (ATIN) instead of an SSN. See Taxpayer identification numbers for aliens or Taxpayer identification number for adoptees, later.

No social security number.   If a person for whom you expect to claim an exemption on your return does not have an SSN, either you or that person should apply for an SSN as soon as possible by filing Form SS-5, Application for a Social Security Card, with the Social Security Administration (SSA). Information about applying for an SSN and Form SS-5 is available at your local SSA office.

It usually takes about 2 weeks to get an SSN. If you do not have a required SSN by the filing due date, you can file Form 4868 for an extension of time to file.

Born and died in 2002.   If your child was born and died in 2002, and you do not have an SSN for the child, you may attach a copy of the child's birth certificate instead. If you do, enter DIED in column (2) of line 6c of your Form 1040 or Form 1040A.

Taxpayer identification numbers for aliens.   If your dependent is a resident or nonresident alien who does not have and is not eligible to get an SSN, the IRS will issue your dependent an individual taxpayer identification number (ITIN) instead of an SSN. Write the number in column (2) of line 6c of your Form 1040 or Form 1040A. To apply for an ITIN, use Form W-7, Application for IRS Individual Taxpayer Identification Number.

It usually takes about 4 to 6 weeks to get an ITIN.

Taxpayer identification numbers for adoptees.   If you have a child who was placed with you by an authorized placement agency, you may be able to claim an exemption for the child. However, if you cannot get an SSN or an ITIN for the child, you must get an adoption taxpayer identification number (ATIN) for the child from the IRS. See Form W-7A, Application for Taxpayer Identification Number for Pending U.S. Adoptions, for details.

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