Custody, Kids and Taxes

If your child or children lived with you for most of the year and you provided most of their support (financially), you can claim him/her/them on your tax return. Claiming them (as well meeting other requirements) entitles you to these tax benefits: Child Tax Credit or Credit for Other Dependents, the Additional Child Tax Credit, Earned Income Credit, Head of Household Filing Status, and/or the Credit for the Child and Dependent Care Expenses. Things can get complicated, however, when there are multiple people trying to claim the same kid. It can be between two divorced parents, a parent and grandparent, etc. At that point, tiebreaker rules apply.

Doesn’t the custody agreement determine who gets to claim the child on their tax return?

Not necessarily. The agreement determines who gets the child on which dates or days (future). But the custodial parent is whomever the child lived with the greater number of nights during the year (past). And the custodial parent can only claim the benefits mentioned above (and not the non-custodial parent).

Can the non-custodial parent still claim the child instead?

Only if the custodial parent signs IRS Form 8332, release of claim and exemption. However, the non-custodial parent can only claim the Child Tax Credit or Credit for Other Dependents, and/or the Additional Child Tax Credit. All the other credits still belong to the custodial parent.

What documents do I need for proof of eligibility?

  • Birth Certificate of Child or Adoption Records
  • School Records and/or Medical Records showing:
    • address in which you both lived for more than ½ a year
    • the child’s name
    • date for the tax year
  • Divorce Decree (if applicable)
  • Household bills such as rent receipts, grocery bills and utility bills (if you are claiming Head of Household)

If you are going to a tax preparer, make copies of the documents above.

My child mainly lived with my relatives, but I still sent them money to support him/her. Can I still claim him/her?

As a qualifying child? No, since the child didn’t live with you (or your spouse) for more than half of the year.
As a qualifying relative? Possibly, if he/she will not be claimed as the qualifying child of the relative, you provided more than half of the child’s support (financially), and the child did not make more than $4,150 during the year. As a caveat, I’d discuss with the relatives on this issue before filing.

My child and I live with my mother, but my mother supports both of us and pays most of the household expenses. Can she claim my child as a qualifying child?

Yes, if your mother has a higher adjusted gross income than you (i.e. makes more money).