Skip to main content

If you’ve recently divorced or separated, this may be your first year having to file taxes. One of the most common questions of parents in your situation is “Who claims child on taxes with 50/50 custody situations?” It’s an important question, as the answer can significantly impact your finances. In general, the custodial parent is entitled to federal and state tax deductions and benefits. However, the answer becomes a bit more complicated if you and your ex are following a true 50/50 custody schedule. In this article, we’ll dive into the rules and considerations surrounding child tax claims in shared custody situations.

Understanding Child Tax Benefits

Before diving into 50/50 custody, let’s ensure we understand the child tax benefits. In the United States, there are several tax benefits available to parents who have custody of their children, which include:

  1. Child Tax Credit: This credit can reduce your federal income tax by up to $2,000 per qualifying child under certain income thresholds.[1]
  2. Child and Dependent Care Credit: If you pay for childcare expenses while you work, you may be eligible for this credit.[2]
  3. Earned Income Tax Credit: Low to moderate-income families may qualify for this credit, which ranges from $600 for no children to $7,430 for three or more children. [3]
  4. Head of Household Filing Status: This filing status often provides more favorable tax rates than single or married filing separately. [4]

The IRS and 50/50 Custody

Generally, the IRS rules state that the custodial parent may claim the child as a dependent on their taxes. The parent with whom the child lives for a greater number of nights during the tax year is generally considered the custodial parent. So, how does the rule apply when parents have a 50/50 custody split? In this instance, the IRS applies a tiebreaker rule and gives the right to the parent who has the child in their care longer, or the parent who has the child in their care for 183 days and nights out of the year. This rule applies whether the parents are divorced, unmarried, or separated.

If the child spends an equal number of nights with each parent during the tax year, the parent with the higher adjusted gross income (AGI) is typically the one who gets to claim the child as their dependent. This is because a higher income usually means a higher tax bracket, so higher-income parents typically pay more taxes. The parent with the right to claim the child as a dependent could change yearly. This changes depending on any changes in income.

Parents Can Decide Who Claims Child on Taxes with 50/50 Custody Situations

The IRS has legal guidelines and tiebreaker rules for claiming children as dependents. However, the IRS is not going to enforce these rules if you and the other parent can mutually agree about who claims the child on taxes. For example, a common arrangement among parents with shared 50/50 custody is to alternate years, so you could claim the child in odd years and the other parent could claim the child in even years. When there are two children involved, you could agree that each parent should claim one child each year. This type of agreement can be included in your divorce decree or custody judgment.

It’s important to note that the custodial parent can formally release their right to claim a child as a dependent. This would be done by filling out IRS Form 8332, the Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent.[5] Once complete and signed, the noncustodial parent can claim the child as a dependent and as a qualifying child for the child tax credit. However, the noncustodial parent will not be able to claim head of household filing status, the earned income credit, or child and dependent care expenses.

What Happens if Both Parents Claim the Same Child in the Same Year?

If both parents claim the same child as a dependent, the IRS will reject one or both tax returns. This happens automatically if you file electronically. Typically, the parent that files last will have to amend and refile their return to correct the error.

Navigating child custody and tax-related matters can be challenging, especially when dealing with a 50/50 custody arrangement. It’s important to consult with a legal professional who specializes in family law and tax-related matters. At Gordon Delić & Associates, we have a team of experienced attorneys ready to assist you.  We can help you navigate the complexities of tax law and custody arrangements to ensure that you understand your rights and obligations when it comes to claiming your children on taxes. Call us today!





[5] chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/