Claiming a Child as a Dependent When Parents are Divorced, Separated, or Live Apart

The IRS has very specific rules about who may claim the child tax for tax purposes in situations where parents are divorced, separated, never married, or live apart and who share custody of a child with an ex-spouse or ex-partner. To avoid processing delays or costly tax errors, it is vital that taxpayers in these situations know those rules. The IRS provides the following details:

“Only one person may be eligible to claim the qualifying child as a dependent.

Only one person can claim the tax benefits related to a dependent child who meets the qualifying child rules. Parents can’t share or split up the tax benefits for their child on their respective tax returns.

If two people claim the same child on different tax returns, it will slow down processing time while the IRS determines which parent’s claim takes priority, so it is important that each parent understands who will claim their child on their tax return.

Custodial parents generally claim the qualifying child as a dependent on their return.

  • The custodial parent is the parent with whom the child lived for the greater number of nights during the year. The other parent is the noncustodial parent.
  • In most cases, because of the residency test, the custodial parent claims the child on their tax return.
  • If the child lived with each parent for an equal number of nights during the year, the custodial parent is the parent with the higher adjusted gross income.

Tie-breaker rules may apply if the child is a qualifying child of more than one person.

  • Although the child may meet the conditions to be a qualifying child of either parent, only one person can actually claim the child as a qualifying child, provided the taxpayer is eligible.
  • IRS Publication 504, Divorced or Separated Individuals provides more information to understand who is eligible to claim a qualifying child.

Noncustodial parents may be eligible to claim a qualifying child.
Special rules apply for a child to be treated as a qualifying child of the noncustodial parent.

  • The custodial parent can release the dependency exemption and sign a written declaration or Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent for the noncustodial parent to submit with their tax return.
  • This also applies to some tax benefits, including the child tax credit, additional child tax credit, and credit for other dependents. It doesn’t apply to other tax benefits, such as the earned income credit, dependent care credit or head of household filing status.”

IRS Publication 501, Dependents, Standard Deduction, and Filing Information
Whom May I Claim as a Dependent? provides more information, or give R&A a call. 

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