There may be situations in which more than one person qualifies to claim a child as a qualifying child for tax purposes. That is, the child meets the relationship, age, residency, support, and joint return tests to be the qualifying child of more than one person. Some examples of when this could occur are when a child lives with a parent and grandparent or other relative in the same home, when the parents are separated and the child lived with both parents more than half the year, when the parents are unmarried, and when the child does not live with a parent.
Who claims the child as a qualifying child is important because it determines who can claim the dependency exemption, the earned income tax credit, the child tax credit, and the credit for child and dependent care expenses, or the exclusion from tax of dependent care benefits received, for example from an employer. It could also determine who qualifies to file as head of household. Only one person can claim these tax benefits. The other people who could potentially claim the child cannot claim the benefits for the same child. And the benefits cannot be apportioned or shared.
If the persons who could claim the child as a qualifying child cannot agree on who will actually claim the child, the IRS has what are called tie-breaker rules to determine who claims the child as a qualifying child and is entitled to the corresponding tax benefits.
- 1. The parents claim the child if they file a joint return.
- 2. If only one of the persons who can claim the child is the child’s parent, the parent claims the child.
- 3. If both of the child’s parents could claim the child and they do not file a joint return, the parent with whom the child lived the longest during the year claims the child.
- 4. If the child lived with each parent for the same amount of time during the year and the parents do not file a joint return, the parent with the highest adjusted gross income claims the child.
- 5. If neither parent can claim the child as a qualifying child, the person with the highest adjusted gross income claims the child.
- 6. If a parent could claim the child but doesn’t, the person with the highest adjusted gross income can claim the child, provided that his or her adjusted gross income is more than the highest adjusted gross income of either parent. If the parents file a joint return, their adjusted gross income is considered to be divided equally between them for purposes of this tie-breaker rule.
There are special rules for parents who are divorced or separated and live apart and the noncustodial parent claims the child as a qualifying child. In this case the noncustodial parent can claim the dependency exemption and the child tax credit. But the custodial parent, or another person who is eligible, could claim the child as a qualifying child for purposes of filing as head of household, and could claim the earned income credit, the credit for dependent care expenses, or the exclusion of dependent care benefits. If more than one person qualifies for these benefits, then the tie-breaker rules would apply.
Sources:
Publication 501, Exemptions, Standard Deduction, and Filing Information, IRS
Qualifying Child of More Than One Person, IRS
Reference:
- Am I Eligible for the Child Tax Credit? www.irs.gov/uac/Am-I-Eligible-for-the-Child-Tax-Credit%3F
- Child and Dependent Care Credit: www.irs.gov/taxtopics/tc602.html
- Earned Income Tax Credit (EITC): www.irs.gov/Individuals/EITC-Home-Page–It%E2%80%99s-easier-than-ever-to-find-out-if-
