@jeffdnavarro wrote:
I am certain that I qualify for the EITC, and I will likely eliminate my tax bill. More dependents = more credit right? Or is there a point at which more dependents doesnt mean more credit? I am debating on whether or not I should let my ex-spouse to claim more dependents since the income is much higher.
That's complicated and can only be determined by doing some test returns.
First you must understand that if the children live with you more than half the nights of the year, your ex can't claim anything unless you give your ex a signed form 8332 dependent release. That will allow your ex to claim the child tax credit (up to $2000) but not EIC or head of household, those benefits always stay with the parent where the children live and can't be waived, transferred or shared.
You will max out your EIC at three children, 4 or more will not add anything. But as I said above, your ex can't use a child to claim EIC.
Your child tax credit may be limited to less than $2000 per child because of your low income earned from working, so it could be that by releasing a child to your ex, your ex gains more than you lose. But the only way to know is to test different combinations.
