Q: Does the Form 8332 (used to release the exemption to the noncustodial parent) affect the Child Tax Credit?

A: Yes. The Child Tax Credit can only be claimed by the parent claiming the exemption. In this case the noncustodial parent would qualify for the dependency exemption and therefore the child tax credit. Please refer to the Instructions for Form 1040 (PDF) or the Instructions for Form 1040A index for Child Tax Credit. The referenced pages will explain who qualifies for this credit, and how to calculate it.

More on the Child Tax Credit: Publication 972

Q: If the noncustodial parent receives permission from the custodial parent to claim a child on his or her tax return, is the noncustodial parent eligible for the Earned Income Credit?

A: The noncustodial parent cannot claim the Earned Income Credit on the basis of that child because the child did not live with that parent and does not meet the residency test. The custodial parent may be able to claim the Earned Income Credit.

Refer to Publication 596, Earned Income Credit, for the Earned Income Credit rules.