Since you are the custodial parent according to the IRS for child situations you will indicate this in the interview by choosing the option that you are waiving the exemption to the non custodial parent via a form 8332. This way you keep the dependent for HOH filing status, the Day care credit on form 2441 and the EIC credit.
If you are the custodial parent then you should list the child in the TT program and indicate which ones you are waiving to the non custodial parent via a form 8332... doing this will get you the breaks you qualify for ... just make sure the non custodial parent understands the IRS rules ...
Generally, only the custodial parent is eligible to claim the following tax breaks:
- the dependent's personal exemption
- head of household filing status (if applicable)
- child and dependent care tax credit
- child tax credit and additional child tax credit
- earned income tax credit
- exclusion for dependent care benefits
- tuition and fees deduction or the education tax credits
However, the custodial parent can waive his or her right to claim a dependent in favor of the non-custodial parent. The non-custodial parent would then be able to claim:
- the dependent's personal exemption,
- child tax credit and additional child tax credit
- tuition and fees deduction or the education tax credits
If you look at the 1040 form under dependents, the child you do not claim should not be listed.
In TurboTax if you edit the personal information. dependents section then the child should be listed as "Non-dependent - EIC and dependent care only".
You should have entered the child this way:
If you are the custodial parent where the child physically lived for more than half the year (183 nights) then:
When you enter the dependent, you say that he/she is "Your child" (not you and your spouse if remarried),
he/she lived with you the whole year,
“no” the child did not pay more than half of his/her own support,
"yes", you have a custody agreement,
and "yes", the other parent is claiming this year.
That will give you the EIC, Child Care Credit and Head of Household filing status if you otherwise qualify.
The child would be listed as "non-dependent EIC & Dependent Care only".
The other (non-custodial) parent can claim the child’s exemption and child tax credit only and needs a signed 8332 form to do so.
