Updated July 28, 2026. Quick answer: It transfers the dependency claim and the child tax credit. It does not move head-of-household status, the earned income credit, or the child and dependent care credit — each of those is determined by statute without regard to §152(e). The framing that Form 8332 “transfers the child for tax purposes” is wrong in three separate places, each quotable.
The three overrides
| Benefit | Follows Form 8332? | Authority |
|---|---|---|
| Dependency claim | Yes | §152(e) |
| Child tax credit | Yes | Form 8332 itself |
| Head of household | No | §2(b)(1)(A)(i) — determined “without regard to section 152(e)” |
| Earned income credit | No | §32(c)(3)(A) — same phrase |
| Child and dependent care credit | No | §21(e)(5) — the child is a qualifying individual for the custodial parent and “shall not be treated as a qualifying individual with respect to the noncustodial parent” |
Which means a custodial parent who signs the release keeps more than they usually realise. Head of household filing status, the earned income credit and the dependent care credit all stay with them. A negotiation conducted on the belief that signing hands over everything is being conducted on a false premise — in the custodial parent’s favour, and usually without either side knowing it.
Who is the custodial parent
The parent with whom the child lived for the greater number of nights during the year, with a higher-income tiebreak if the nights are equal. It is a counting question, not a legal-custody question, and the decree’s language about custody does not settle it.
Revoking takes a year
A revocation is effective no earlier than the tax year following the year you give the other parent a copy. Deciding in March to stop the release for the current year does not work.
Sources
IRC §1041(a), (b), (c) and Temp. Reg. §1.1041-1T(b) Q&A-7; §414(p); §72(t)(2)(C) and §72(t)(3)(A); §408(d)(6); §121(a), (b), (d)(3); §7703(a) and (b); §152(e); §2(b)(1)(A)(i); §32(c)(3)(A); §21(e)(5); the repeal of §§71 and 215 by Pub. L. 115-97 §11051 and its effective-date note; IRS Form 8332 (current revision). All read July 2026.
This states what the cited authority says. It is not tax advice, and retirement-plan design turns on facts about your business and your other entities that no page can see. Every dollar limit referenced here is indexed and changes annually.