If You Have Joint Custody, Who Claims the Child on Taxes?

For parents with joint custody, determining who can claim a child on their tax return can be confusing. The Internal Revenue Service (IRS) provides specific regulations to prevent disputes and clarify which parent is entitled to the associated tax benefits. These rules establish a clear hierarchy for deciding who claims the child, ensuring only one person receives the tax advantages in any given year.

While parents can create their own agreements, the IRS rules serve as the default mechanism, especially in cases of disagreement. This structure helps ensure that tax filings are consistent and compliant, preventing issues that can arise from both parents attempting to claim the same child.

The IRS Tie-Breaker Rules for a Qualifying Child

The foundation of the IRS rules for claiming a child is the concept of the “custodial parent.” This is defined as the parent with whom the child lived for the greater number of nights during the tax year. To meet this standard, the child must have resided with that parent for at least 183 nights. The IRS is precise about counting nights, including temporary absences for things like vacation, illness, or time at a summer camp as nights spent at the parent’s home if that is where the child would have otherwise been.

When a child spends an equal number of nights with each parent, a situation common in 50/50 custody arrangements, the IRS applies a series of tie-breaker rules. The primary rule is that the parent with the higher adjusted gross income (AGI) for the tax year is granted the right to claim the child. Your AGI is your gross income minus certain above-the-line deductions. Another tie-breaker rule addresses the circumstance where only one of the individuals is the child’s biological or adoptive parent; in that case, that parent is the one who can claim the child.

Tax Benefits Associated with a Qualifying Child

Claiming a qualifying child provides access to several tax benefits, but not all of them can be transferred from the custodial to the noncustodial parent. The most significant benefit that can be transferred is the Child Tax Credit. For the noncustodial parent to claim this credit, the custodial parent must release their claim to the dependency exemption for the child. While the Tax Cuts and Jobs Act of 2017 suspended the deduction for dependency exemptions through 2025, releasing the claim is the procedural step required by the IRS. This transfer allows the noncustodial parent to claim the Child Tax Credit and the related Credit for Other Dependents.

Certain tax benefits, however, are non-transferable and remain exclusively with the custodial parent, regardless of any agreement. These include:

• Head of Household filing status
• The Earned Income Tax Credit (EITC)
• The Child and Dependent Care Credit
• The tax-free exclusion for dependent care benefits

For example, even if you sign a release for the noncustodial parent to claim the Child Tax Credit, you may still file as Head of Household if you meet the requirements. The EITC and the Child and Dependent Care Credit are also only available to the parent with whom the child lived for the greater part of the year.

Transferring the Right to Claim a Dependent

The formal mechanism for a custodial parent to permit a noncustodial parent to claim a child is IRS Form 8332, “Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent.” To complete the form, the custodial parent must provide their name and Social Security number (SSN), the noncustodial parent’s name and SSN, the child’s name, and specify the tax year or years for which the release is effective.

Once the custodial parent signs and dates Form 8332, they must give the physical form to the noncustodial parent. The noncustodial parent must attach a copy of the signed form to their tax return for every year they claim the child under the agreement. Failing to attach the form can result in the IRS disallowing the claim, even if a verbal agreement existed. The form can be used to release the claim for a single year, multiple years, or all future years.

While Form 8332 is the IRS-preferred method, a divorce decree or separation agreement may substitute for the form if it contains specific, unambiguous language. The document must state that the custodial parent will not claim the child as a dependent, identify the noncustodial parent who can claim the child, and specify the years the agreement covers. Relying on a court order can be risky if it lacks the precise information the IRS requires, making Form 8332 the more reliable option.

IRS Procedures for Duplicate Claims

When two taxpayers file separate returns claiming the same child, the IRS will respond. If both returns are submitted electronically, the e-file system will typically reject the second return that is filed. This rejection serves as the first notification of a duplicate claim and prevents the second return from being processed until the issue is resolved.

If one or both returns are filed on paper, or if the e-file system accepts both, the IRS processing system will eventually flag the duplicate claim. The agency will send a notice, often a CP87A notice, to both individuals who claimed the child. This letter informs both parties of the conflicting claims and instructs that one of them must file an amended tax return to correct the error.

Should neither parent take action to amend their return, the IRS will intervene directly. The agency will apply the tie-breaker rules to determine which parent had the legitimate right to claim the child for that tax year. The IRS may then initiate an audit of one or both parents’ returns to verify the facts. The parent found to have incorrectly claimed the child will be required to repay any refund they received, along with potential penalties and interest.