Can Both Parents Claim a Child Dependent?

Determining who can claim a child as a dependent for tax purposes is a common challenge, especially for parents who are not married or do not live together. Generally, only one parent can claim a child in a given year. Understanding specific Internal Revenue Service (IRS) rules is important for navigating these claims.

IRS Rules for Claiming a Child Dependent

The IRS establishes specific criteria for a child to be considered a “qualifying child” for dependency purposes. These criteria include relationship, age, residency, support, and joint return tests. The child must be a son, daughter, stepchild, eligible foster child, brother, sister, half-brother, half-sister, stepbrother, stepsister, or a descendant of any of them.

The age test requires the child to be under age 19 at the end of the tax year, or under age 24 if a full-time student for at least five months. A child who is permanently and totally disabled can be any age. For the residency test, the child must have lived with the taxpayer for more than half the year. The support test stipulates the child cannot have provided more than half of their own financial support. The joint return test means the child cannot file a joint tax return, unless filed solely to claim a refund of withheld income tax or estimated tax paid.

When parents are separated or divorced, the IRS uses a specific tie-breaker rule. The “custodial parent” is the parent with whom the child lived for the greater number of nights. This parent has the default right to claim the child. If a child lived with each parent for an equal number of nights, the parent with the higher adjusted gross income (AGI) is considered the custodial parent.

Claiming a Child When Parents Are Not Married

The IRS allows a noncustodial parent to claim a child as a dependent if the custodial parent formally releases their claim. This release is done using IRS Form 8332, “Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent.” A divorce decree or separation agreement alone is not sufficient for the IRS to transfer the dependency claim.

To complete Form 8332, the custodial parent must provide the child’s name, the tax year(s) for which the claim is released, their Social Security number, signature, and date. The custodial parent can release the claim for a single tax year or multiple future years. The noncustodial parent must attach Form 8332, or a written declaration that substantially conforms to the form, to their tax return each year they claim the child.

While Form 8332 allows the noncustodial parent to claim the dependency exemption and Child Tax Credit, other tax benefits remain with the custodial parent. Benefits like the Head of Household filing status or the Child and Dependent Care Credit are tied to the parent with whom the child lived for the majority of the year, regardless of who claims the dependency.

Tax Benefits Linked to Claiming a Dependent Child

Claiming a child as a dependent can unlock several tax benefits. The Child Tax Credit (CTC) offers up to $2,000 per qualifying child for the 2024 tax year, with up to $1,700 refundable as the Additional Child Tax Credit (ACTC). To qualify, the child must be under age 17 at the end of the tax year and meet other dependency criteria, including having a valid Social Security number. A noncustodial parent can claim the CTC if the custodial parent properly releases the claim using Form 8332.

The Credit for Other Dependents offers a nonrefundable credit of up to $500 for qualifying dependents not eligible for the Child Tax Credit. This applies to older children or other relatives who meet specific criteria. The Earned Income Tax Credit (EITC) is a refundable credit for low- to moderate-income workers. It goes to the parent with whom the child lived for more than half the year, irrespective of who claims the dependency exemption. The custodial parent claims the EITC.

The Head of Household filing status provides a higher standard deduction and lower tax rates compared to filing as single. This status is reserved for the custodial parent, even if they release the dependency claim. The custodial parent must have paid more than half the cost of maintaining the home and the child must have lived with them for over half the year. The Child and Dependent Care Credit, which helps offset childcare expenses, is claimed by the custodial parent.

Resolving Conflicting Claims by Parents

When both parents claim the same child as a dependent in the same tax year, the IRS identifies the conflicting claims. The IRS sends notices, such as CP87A or CP75A, to both taxpayers. These notices indicate another taxpayer has claimed the same dependent and request verification.

Upon receiving such a notice, taxpayers should review their records and IRS dependency rules. If the custodial parent did not provide Form 8332, or if the noncustodial parent claimed the child without the necessary form, the IRS will rule in favor of the custodial parent based on the residency test. If the claim was made in error, the taxpayer should file an amended return, Form 1040-X, to remove the incorrect dependent claim and associated benefits.

If both parents believe they are entitled to claim the child, and the tie-breaker rules do not resolve the issue, the parent with the higher Adjusted Gross Income (AGI) can claim the child if the child lived with each parent for an equal number of nights. Responding promptly to IRS notices and providing requested documentation is important for resolving these disputes.