We need to know more about the living situation, and the income of the two parents; but here's the basic math;
1. You only get a $500 dependent credit for claiming the child (assuming you're not the legal step parent or otherwise closely related)
2. The non custodial parent (the biological father) gets $2000 for claiming the child
3. The custodial parent (if she has sufficient income) gets up to $5400. But, if the custodial parent had sufficient income, and lived with you and the child, you would not be allowed to claim the child at all (the qualifying child of another taxpayer rule)
