The Michigan Court of Appeals decided Clarke v Clarke, 297 Mich App 172 (2012) on June 26, 2012. In this decision, despite the fact that the tax exemption had been agreed to be alternated between the parties in odd and even numbered years, the court of appeals makes clear that the tax exemption is related to the child support and can be modified by the trial court.
IRS Publication 501 (a downloadable PDF file) makes clear that to be entitled to the tax exemption according to the federal tax code, a parent must have custody of the child for more than one half of the year, and it was this requirement that was the rationale for the Clarke panel’s decision. For the rules regarding the exemption, see IRS Publ. 501 at Table 5. "Overview of the Rules for Claiming an Exemption for a Dependent." [Page 12]
“In the odd numbered years Edwin will spend one day more than half time with Defendant, and Defendant will be entitled to claim head of household filing status and to claim Edwin as a dependent. In the even numbered years Edwin will spend one day more than half time with Plaintiff, and Plaintiff will be entitled to claim head of household filing status and to claim Edwin as a dependent. Each party will execute any IRS documents necessary to effectuate this provision.
Thus, the family court, upon being provided proof that the child did not spend more than half of the year with the Defendant Father, modified the judgment, awarding the federal dependency tax exemption to the mother.
Download Clarke_v_Clarke here.
Further, Download IRS_Publication_501: Waiver of Exemption must be Unconditional
Post-1984 and pre-2009 divorce decree or separation agreement:
If the divorce decree went into effect after 1984 and before 2009, the noncustodial parent may be able to attach certain pages from the the decree or agreement instead of Form 8332. The decree or agreement must state all three of the following:
1. The noncustodial parent can claim the child as a dependent without regard to any condition, such as payment of support.
2. The custodial parent will not claim the child as a dependent for the year.
3. The years for which the noncustodial parent, rather than the custodial parent, can claim the child as a dependent. Publ. 501 at page 13.
Download IRS_Publication_504 for "Divorced or Separated Individuals." See especially at page 8 to 12 regarding exemptions for dependents.
Note too: In a leap year, there are 366 days. Thus if the judgment provides for 50/50 custody and provides doe one parent to get the exemption in even-numbered years and the other in odd-numbered years, but it's a leap year: there is a catch. There is a "tie-breaker rule." See page 11 of IRS Publication 504.