@Bonusmomma
It’s still slightly unclear, because you say “we “ and “the father” and I think you the “we” are the mother and a new partner? And the father is someone different?
If the mother has custody more than half the nights of the year, and you are going to follow a court order to allow the non-custodial father to claim the child as a dependent, the custodial parent must give the non-custodial parent a signed form 8332 dependent release. In the dependent interview, the mother will answer yes, that she has custody more than half the year, and yes, there is a legal custody agreement, and yes, you are giving the other parent a signed release. In that case, the child should be marked with the status “non-dependent, use for EIC and dependent care”. Even though you do not claim the $2000 child tax credit, the child allows you to qualify for EIC, and the dependent care benefit if you meet the other qualifications. If the mother is unmarried, the childhood qualify her to file as head of household instead of single. Those tax benefits can’t be waived, transferred, or shared with the other parent, even if there is a court order. So don’t delete the child, change the status by changing the answers in the interview.
The non-custodial parent would answer no that they do not have custody more than half the year, yes, there is a custody agreement, and yes, the other parent will give them a signed release form. The other parent will claim the $2000 tax credit, but the software will not allow the other parent to qualify for EIC or head of household, because those benefits can’t be shared. The other parent will also have to mail the signed original form 8332 attached to the rest of their tax return. Both you and the other parent should keep a photo copy of the signed form 8332 for your records.
