If the custodial parent signs 8332, you will indicate that on your own tax return. Then you will b eligible to get the child tax credit for 2020. The custodial parent will retain the right to file as Head of Household, get earned income credit, and claim the childcare credit. As the non-custodial parent, you cannot file as HOH (unless you have another blood-related dependent to claim), you cannot get earned income credit based on claiming the child, and you cannot get the childcare credit.
Again---your W-4 only tells your employer how much to withhold. The information you put on a W-4 does not obligate you to file in any particular way--you just want to make sure you have had enough tax withheld so you do not owe, right?
Some information about the child tax credit that might help you know what to expect:
CHILD TAX CREDIT
There was lots of hype in the news about the new $2000 Child Tax Credit when the tax law changed for 2018 and beyond. Unfortunately, some people do not yet understand that it does not mean they will automatically receive $2000 per child just for filing a tax return.
Do not assume your refund will include $2000 per child for child tax credits. It does not work that way. The CTC is used first to reduce your tax liability to zero. After that, there is a refundable portion —up to $1400 — called the Additional Child Tax Credit that is calculated based on the amount of income you earned. You do not necessarily get the maximum amount. You get 15% of the amount of income earned above $2500--UP to the maximum amount possible.
If your child turned 17 in 2020, even on the last day of 2020, you do not get the child tax credit. There are no exceptions to the rule. You can still claim your child as a dependent.
Your child must have a Social Security number to get the CTC.
If your child was born in 2020 you need to say the child lived with you for the WHOLE year.
If your child lived with you for less than half the year you cannot get CTC.
If you did not earn at least $2500 you cannot receive the refundable additional child tax credit. Beyond that amount the CTC you receive is affected by your tax liability and the amount you earned. You might not get the full $2000 of CTC.
The child tax credit is reduced by $50 for every $1000 of AGI over these limits:
Married filing jointly $400,000 (CTC disappears at $440,000)
Single, Head of Household, Married Filing Separately or qualifying widower $200,000 (CTC disappears at $240,000)
https://ttlc.intuit.com/questions/1900923-what-is-the-child-tax-credit
**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
