Can Both Parents Claim Dependents on Their Taxes?
Navigate the complexities of claiming dependents when parents don't file jointly. Understand IRS rules to ensure proper claims and avoid common pitfalls.
Claiming dependents on a tax return significantly impacts a taxpayer’s financial outcome. The Internal Revenue Service (IRS) has specific rules governing who can be claimed, especially in situations involving separated or divorced parents. Understanding these regulations is crucial for compliance and to maximize eligible tax benefits.
General Rules for Claiming a Dependent
To claim someone as a dependent, they generally must meet the criteria for either a “qualifying child” or a “qualifying relative.” A qualifying child must meet five tests: relationship, age, residency, support, and joint return. The relationship test requires the child to be your son, daughter, stepchild, foster child, brother, sister, half-brother, half-sister, stepbrother, stepsister, or a descendant of any of them. The age test typically requires the child to be under age 19, or under age 24 if a full-time student, and younger than you (or your spouse if filing jointly), unless they are permanently and totally disabled.
For the residency test, the child must have lived with you for more than half the year. The support test means the child cannot have provided more than half of their own support for the year. Finally, the joint return test stipulates that the child cannot file a joint return for the year, unless it is filed solely to claim a refund of withheld income tax or estimated tax paid. A “qualifying relative” has a different set of criteria, including gross income, support, and relationship tests.
Specific Rules for Separated or Divorced Parents
When parents are separated or divorced, the IRS applies specific “tie-breaker rules” to determine which parent can claim a child as a dependent. Generally, the parent with whom the child lived for the longer period during the tax year is considered the “custodial parent” for tax purposes. This determination is based on physical custody, not legal custody agreements.
The custodial parent is typically the one entitled to claim the child as a dependent. However, a noncustodial parent can claim the child as a dependent if the custodial parent signs Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent. The noncustodial parent must attach a copy of this signed Form 8332 to their tax return each year they claim the child.
Form 8332 must include the custodial parent’s signature, the year(s) for which the claim is released, and the noncustodial parent’s name. Without a properly executed Form 8332, the noncustodial parent cannot claim the child, even if their divorce agreement states they can.
Tax Benefits Associated with Dependents
Claiming a qualifying dependent can unlock several valuable tax benefits. One common benefit is the Child Tax Credit, which for 2024 is worth up to $2,000 per qualifying child. A portion of this credit, up to $1,700 per qualifying child for 2024, may be refundable, known as the Additional Child Tax Credit. This means you could receive money back even if you owe no tax.
For dependents who do not qualify for the Child Tax Credit, such as those aged 17 or older, the Credit for Other Dependents may be available, offering a non-refundable credit of up to $500 per qualifying dependent. The Earned Income Tax Credit (EITC) is another benefit that can be significantly impacted by having qualifying children, potentially increasing the credit amount for eligible low-to-moderate-income taxpayers. The Head of Household filing status also provides a higher standard deduction and potentially lower tax rates than filing as single. To qualify, you must be unmarried, pay more than half the cost of maintaining a home, and have a qualifying person living with you for more than half the year.
The Child and Dependent Care Credit helps offset expenses paid for the care of a qualifying person to allow you (and your spouse, if filing jointly) to work or look for work. For 2024, the maximum amount of care expenses that can be used to calculate this non-refundable credit is $3,000 for one qualifying person or $6,000 for two or more qualifying persons. The credit amount ranges from 20% to 35% of these expenses, depending on your adjusted gross income.
When Both Parents Claim the Same Dependent
When the IRS receives two tax returns claiming the same dependent, it identifies this discrepancy through its processing systems. The IRS will send a notice, such as a CP87A, to both taxpayers involved. This notice informs each filer that another return claimed the same dependent and advises them to review the rules for claiming dependents. The IRS does not disclose the identity of the other filer.
The IRS will then apply its tie-breaker rules to determine which taxpayer is entitled to claim the dependent. If the child lived with both parents for an equal amount of time, the parent with the higher adjusted gross income will be the one entitled to claim the dependent. If a taxpayer receives a CP87A notice and determines they incorrectly claimed the dependent, they should file an amended return using Form 1040-X to remove the dependent and associated tax benefits.
If neither taxpayer amends their return, the IRS will make a determination based on its rules, which could result in one or both taxpayers owing additional taxes, penalties, and interest. For the 2025 filing season, the IRS will accept e-filed returns with duplicate dependent claims if the primary taxpayer on the second return includes a valid Identity Protection Personal Identification Number (IP PIN), aiming to speed up refund issuance. This new process does not change the underlying rules of who is entitled to claim the dependent.