You're misinterpreting the emancipation lives with rule. There is no "custody" once a child reaches the age of emancipation. The IRS rules now govern. Even though a child is not legally a minor at age 18 (in most states), under IRS rules, the child of a taxpayer can still be a “Qualifying Child” (QC) dependent, regardless of his/her income, if:
1. He is under age 19, or under 24 if a full time student for at least 5 months of the year, or is totally & permanently disabled
2. He did not provide more than 1/2 his own support. Scholarships are considered third party support and not as support provided by the student. Note that there is no requirement that you provided support.
3. He physically resided with the parent (including temporary absences such as away at school) for more than half the year.
If he lived with both parents for more than half the year, then the tie breaker rules say the parent he lived with the most gets to claim him. That rule trumps the higher AGI rule.
Side issue: if still married, you only qualify for head of household if you lived apart the entire 2nd half of 2020.
