Who Claims a Child on Taxes With 50/50 Custody?
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Summary:
Claiming a child on your taxes has several potential tax benefits. To determine who can claim a child on taxes with 50/50 custody, we look at three main qualifiers: custodial time, income, and mutual agreement between parents. When time is split 50/50 between two parents, the parent with the higher income claims the child. Alternatively, the two parents can come to a mutual agreement on how to handle claiming dependents. It’s important to know that if each parent files separately, only one parent can claim the same child on their taxes.
Around 30% of children in the United States don’t live with both of their parents full-time. If you are a parent, you must consider how to claim your child on your tax return. Taxes are confusing, especially for separated parents with 50/50 custody.
Fortunately, the Internal Revenue Service (IRS) lays out rules for handling situations like this, and we’re here to help you sift through those rules.
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Co-parents claiming dependents on taxes
Federal tax law outlines how separated or divorced parents should handle their taxes. Specifically, IRS “Publication 504: Divorced or Separated Individuals” can give us insight into navigating these tricky situations.
When you file your taxes every year, you can claim dependents (usually children) and receive tax benefits. However, not just anyone can claim a child as a dependent. According to IRS Publication 504, the following items must be true to claim a child on your taxes:
- The child must be your son, daughter, stepchild, foster child, brother, sister, half-brother, half-sister, stepbrother, stepsister, or a descendant of any of them.
- The child must be (a) under age 19 at the end of the year and younger than you (or your spouse if filing jointly); (b) under age 24 at the end of the year, a student, and younger than you (or your spouse if filing jointly); or (c) any age if permanently and totally disabled.
- The child must have lived with you for more than half of the year.
- The child must not have provided more than half of his or her own support for the year.
- The child must not be filing a joint return for the year (unless that joint return is filed only to claim a refund of withheld income tax or estimated tax paid).
For divorced or separated parents with 50/50 custody, it’s often a tie for all or most of these items.
Which parent can claim a child as a dependent on taxes with joint custody?
The IRS has specific definitions for child custody as it relates to taxes. The custodial parent is “the parent with whom the child lived for the longer period of time during the year.” Therefore, the noncustodial parent is the one with whom the child lived for the lesser period during the tax year.
According to the IRS, you can only claim a child as your dependent on taxes if he or she is your qualifying child. By default, a qualifying child is the child of the custodial parent. However, the child can become the qualifying child of the noncustodial parent if:
- The custodial parent signs IRS Form 8332 (Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent) or a similar statement, and
- The noncustodial parent attaches Form 8332 or a similar statement to his or her tax returns.
So, who claims a child as a dependent when the parents are divorced or legally separated? The answer is simple when one parent has a majority or full custody over a child. Most often, the custodial parent gets to claim the child. In other words, if a child lives with Parent A for more time in a year than Parent B, Parent A gets to claim the child as a dependent.
When divorced or separated parents split custody 50/50, it can get more confusing. Parenting time, income, and agreement (in that order) between parents can decide which parent gets to declare the child on taxes. Let’s break down how to determine who gets to claim the child as a dependent.
Parenting time
The first way to determine who gets to claim the child on taxes with 50/50 custody is to look at parenting time. Regardless of a legal custody arrangement between two parents, the IRS defines the parent with whom a child lives most of the year as the custodial parent.
If it’s clear who the custodial parent is in your co-parenting situation, that may solve your confusion. That being said, it is possible for the time spent with each parent to be equal, such as if the child spends some time with a third party or during leap years when parents split time precisely in half. If your child spends equal time with you and your co-parent, your income can help determine who can claim the child.
Pro Tip
Let’s say it’s a tie for the custodial time spent with a child. In this case, you would have to use the IRS “tiebreaker rules” to determine who gets to claim the child.
Before examining income, consider one more case that applies to some families: “If only one of the persons is the child’s parent, the child is treated as the qualifying child of the parent.” This tiebreaker applies to separated or divorced couples in which one is the biological parent and one is not.
Income
If parenting time doesn’t give you a clear answer on who can consider the child as their qualifying child, we next look at income. IRS Publication 504 states, “If the child lived with each parent for an equal number of nights during the year, the custodial parent is the parent with the higher adjusted gross income.”
Adjusted gross income (AGI) is your wages, dividends, capital gains, business income, retirement distributions, and other income minus adjustments to income. Therefore, the parent with more income gets to claim the child as a dependent on his or her taxes.
Parental agreement
Lastly, you can discuss tax status with your child’s other parent and settle who will claim your child on taxes. Many co-parents can amicably agree to switch back and forth each year.
Which parent qualifies can change year by year. Changes in income and parenting time can lead to confusion. Some co-parents prefer to document their agreement in writing to remove any uncertainty. Whatever the decision is between you and your child’s other parent, documenting it in your parenting plan can help make tax season simpler.
Pro Tip
As long as only one parent claims the child, you shouldn’t run into any issues. Carefully read through the IRS Publication 504 rules to determine if one of you needs to sign Form 8332 to receive maximum potential tax benefits.
If you still aren’t sure, consult a CPA or tax lawyer if you’re still unclear. You may also receive some assistance or tips from tax preparation software, like those below.
Can both parents claim the child on taxes?
According to IRS rules, parents cannot claim one child on two separate tax returns. Only one taxpayer may claim a single child on taxes per year. The only way that both parents can claim one child is if the parents file jointly.
So, what’s the solution for divorced or separated parents? That’s for each set of parents to decide. Many choose to claim the child on alternate years. Parents of multiple children may split the children between two tax returns.
Available tax credits for parents
The main reason parents sometimes face conflict over who claims a child is the potential tax advantages. Claiming a child on your taxes can earn you tax exemptions.
The following are some available tax benefits for claiming child dependents.
- Child Tax Credit
- Child and Dependent Care Tax Credit
- Head of Household (HOH)
- Earned Income Tax Credit
FAQs
What happens when both parents claim the same child?
When both parents claim the same child on separate tax returns, the IRS automatically decides which parent is the majority custodial parent or has the higher AGI. This parent ends up with the child as a dependent on their tax return.
How do you change a court order about who can claim a child on taxes?
Form 8332 or a substantially similar statement can release or revoke the claim to exemption for a child by the custodial parent.
Who has more right to claim a child on taxes?
The custodial parent has the primary right to claim their child on taxes.
Can a father claim his child on taxes if the child does not live with him?
A noncustodial parent can claim the child if the custodial parent signs IRS Form 8332 or similar.
Who is the custodial parent in 50/50 custody?
Parents rarely split custody exactly evenly. In the IRS rules, both parents can’t be custodial if they are legally separated, divorced, or live in separate households. The parent who spends more time with the child in their custody, even for just one night more, is the custodial parent.
Key Takeaways
- Two parents cannot claim the same child on their tax returns. You’ll have to determine who gets to claim the child each year.
- The IRS states that parents can designate who gets to claim the child on taxes by determining the custodial parent or the parent with higher adjusted gross income. Otherwise, the parents can draft a written agreement between parents stating who claims the child.
- You can look to the IRS rules and examples in Publication 504 to find a solution to your unique situation.
- Consult a CPA or tax attorney to get the most out of your tax return and ensure you abide by federal tax laws.
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