Again, the tax rules are complicated. There are two types of dependents, "Qualifying Children"(QC) and standard ("Qualifying Relative" in IRS parlance even though they don't have to actually be related). There is no income limit for a QC but there is a residence test. Only a QC qualifies a taxpayer for the Earned Income Credit and the Child Tax Credit.
So, your Dad may be able claim you and your child as dependents, since he supports you. But, he cannot get the EIC or Child Tax credit for your child, because the child doesn't live with him. So, he only gets partial tax benefits. Also, since others provide your housing, it may be that your Dad doesn't provide enough support. to claim you
Quite frankly, you cannot know exactly how to file without actually doing trial returns to compare the alternatives. This tool may be useful. <a rel="nofollow" target="_blank" href="
https://turbotax.intuit.com/tax-tools/calculators/taxcaster/?s=1">https://turbotax.intuit.com/tax-to...>
My gut feeling is your Dad should claim you and the child's father should claim her. Note that the non-custodial parent can never claim the Earned Income Credit, Head of Household filing status or the day care credit, even when the custodial parent has released the exemption (dependency) to him.
The custodial parent has first priority on claiming the children on her taxes; regardless of the amount of support provided by the non-custodial parent. The IRS goes by physical custody, not legal custody. The non-custodial parent can only claim the child as a dependent if the custodial parent gives permission (on form 8332) or if it's spelled out in a pre 2009 divorce decree. Form:. <a rel="nofollow" target="_blank" href="
https://www.irs.gov/pub/irs-pdf/f8332.pdf">https://www.irs.gov/pub/irs-pdf/f8332.pdf</a>
