What happens if I still lived with my daughter’s father and we both pay equal into rent and bills and half of everything for our daughter

[xmasbaby0]

If you are a non-married couple who live together then only one of you can claim the child(ren) and the one not claiming the child does not enter anything at all on their tax return about the child. 

[Rick19744]

As your facts state that you are living together, it appears you are still amicable.

A suggestion would be to determine who claims your daughter (assuming this individual qualifies), and that parent prepare their tax return without claiming the daughter and determine what the tax liability is.

Then prepare the return and include the daughter and determine what the tax liability is.

Now you know the tax benefit and maybe you can agree to "split" this tax differential, or agree to reduce some other bill by this amount.

Just a thought and an option.

[Opus 17]

For unmarried parents living together, either parent can claim the child as a dependent, but not both.  You can choose.  If you can't agree, the IRS would award the dependent to the parent with the higher income.

If one parent pays more than half the household expenses, and that parent also claims the child, that parent can file as head of household, which has lower taxes compared to filing as single.  It only has to be $1 more than half, but if each parent pays exactly half, then no one can file as head of household because exactly half is not more than half.

In most cases, you will pay the least tax if the parent with the higher income claims the child as a dependent and files HOH and the other parent files as single.  However, for 2021, because of the advance child tax credit payments and the stimulus payment/recovery rebate, this may not be the case.  You probably want to test it b both ways before you decide how to file.