Right of Divorced Taxpayers to Claim a Dependent Child

February 1st, 2018

QUICK LINKS: Tie-Breaking Rules for Qualifying Child of More Than One Person | Earned Income Tax Credit


When parents separate or divorce, the question of who is entitled to claim the dependency deduction for a child often arises. Individuals contemplating a separation or divorce, or planning to re-marry, should explore their eligibility to claim any dependent children, including those of a spouse-to-be. Final regulations issued by the IRS under Internal Revenue Code Section 152 contain the rules that govern who may claim dependency exemptions in these types of situations.

As you may know, a taxpayer can only claim a dependency deduction for a qualifying child or relative. Support and custody rules also impact a parent’s ability to claim a dependent child’s personal exemption. IRS regulations require a noncustodial parent to attach to his or her tax return a release of claim to an exemption that has been properly executed by the custodial parent. A court order or decree or separation agreement cannot serve as the release of claim. By providing written notice to the noncustodial parent, the release of claim may be revoked, although such revocation is not binding until the year following the notification.

Reporting a dependent on your tax return can make a substantial difference in the deductions and credits available to you, and ultimately, to your final tax bill. Your ability to claim a dependency deduction for a child can also impact the availability of health insurance, certain tax credits, and the qualification guidelines for university scholarships, grants or other financial aid.

Tie-Breaking Rules for Qualifying Child of More Than One Person

Sometimes a child meets the rules to be a qualifying child of more than one person. If the child is the qualifying child of more than one person, only one person can claim the child as a qualifying child for all of the following tax benefits:

  • EITC,
  • Dependency exemption for the child,
  • Child tax credit,
  • Head of household filing status,
  • Credit for the child and dependent care expenses, and
  • Exclusion for dependent care benefits.

The other person(s) cannot take any of the six tax benefits listed above unless he or she has a different qualifying child. If they cannot agree who will claim the child as a qualifying child, and more than one person actually claims tax benefits using the same child, the tie-breaker rules apply.

Tie-Breaker Rules

Under the tie-breaker rule, the child is treated as a qualifying child only by:

  • The parents if they file a joint return;
  • The parent, if only one of the persons is the child’s parent;
  • The parent with whom the child lived the longest during the tax year, if two of the persons are the child’s parent and they do not file a joint return together.
  • The parent with the highest AGI if the child lived with each parent for the same amount of time during the tax year, and they do not file a joint return together;
  • The person with the highest AGI if no parent can claim the child as a qualifying child; or
  • A person with the higher AGI than any parent who can also claim the child as a qualifying child but does not.

Applying the tiebreaker rules to divorced or separated parents (or parents who live apart). If a child is treated as the qualifying child of the noncustodial parent under the rules for children of divorced or separated parents (or parents who live apart), only the noncustodial parent can claim an exemption and the child tax credit for the child. However, only the custodial parent can claim the credit for child and dependent care expenses or the exclusion for dependent care benefits for the child, and only the custodial parent can treat the child as a dependent for the health coverage tax credit.

Also, the noncustodial parent can’t claim the child as a qualifying child for head of household filing status or the earned income credit. Instead, the custodial parent, if eligible, or other eligible person can claim the child as a qualifying child for those two benefits. If the child is the qualifying child of more than one person for these benefits, then the tiebreaker rules determine whether the custodial parent or another eligible person can treat the child as a qualifying child.

Earned Income Tax Credit

If another person uses your qualifying child to claim EITC using the tie breaker rule, you can claim EITC only if you have another qualifying child. You cannot take the credit using the rules for those with no qualifying child.

If you have a qualifying child and do not claim EITC using that qualifying child, you cannot take EITC for those not have a qualifying child. If you have another qualifying child, you may be able to claim the credit using this other child.

There are multiple tax benefits to claiming a qualifying child. However, if your child is possibly a qualifying child for anyone else, please call our office to discuss your situation. It is important to understand your options and the impact on your filing status and potential tax liability.

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