Tiebreaker Rules

• If a child is being claimed as a deduction by both parents on their separate returns, the IRS first looks at which parent the child lived with the longest. If the child lived with his mother for more than six months, the mother gets the deduction and related benefits. But if the child lived with his father for more than six months, then father gets the deduction. If a child lived with each parent for an equal amount of time, the IRS next looks at each parent’s adjusted gross income. The deduction goes to the parent who had the higher adjusted gross income.
  
  

Joint vs. Separate

• Married couples filing jointly get to claim a child deduction even though two parents are getting the benefit of the deduction. That's because the two parents filing jointly count as one taxpayer filing one return. When parents file separate tax returns, each one is a separate taxpayer. That means only one of the parents can claim a particular child. If there were two children who could be claimed by either parent, then the mother could claim one of them and the father could claim the other. Or one parent could claim both children, while the other parent doesn't claim any.
  
  

Normal Case

• Normally, a child is the dependent of the parent the child lives with. The parent the child lived with for half or more of the year is considered the custodial parent who gets to claim the child as a tax deduction. The parent who claims the child also gets the child tax credit, child care credit, head of household filing status, and earned-income credit. The parents can’t split the tax deduction or the related tax benefits between them. It’s all or nothing.
  
  

Voluntary Relinquishment

• The parents who claimed the same children on separate tax returns can settle the issue between themselves by agreeing which parent gets to deduct the children. The custodial parent can agree to forfeit a child deduction and allow the other noncustodial parent to take the deduction by filling out Form 8332 or making a written statement with the same information required by Form 8332. The noncustodial parent then attaches the form or equivalent statement to his tax return when he takes the child deduction. If the parents already filed their taxes, they would have to implement their agreement by each filing a Form 1040X to amend their tax returns.