@M1991
If the child lives in your home more than half the year, but you allow the other parent to claim the child as a dependent, either under court order or voluntarily, then you must give the other parent a form 8332 that you fill out and sign. This form lists the name of the child and the year or years for which that other parent is allowed to claim the child.
When you prepare your tax return, you will indicate that you had custody more than half the year and that you are giving the other parent a form 8332. TurboTax will still allow you to claim tax credits that are based on where the child actually lives — this includes the child and dependent care credit, EIC, and head of household status.
When the other parent prepares their tax return, they should indicate that they had custody less than half the year but are claiming the child because they have a signed form 8332. Their tax program will allow them to claim the child tax credit, and possibly a stimulus payment for 2021, but will not award any of the residency-based benefits. The other parent will also be required to mail the original signed form 8332 to the IRS within three days of submitting their e-filed return.
