500 or 2000 every other year

[DC1520]

Hello. I am the custodial parent, claiming my son every other year. Should my W4 be 500 or 2000 for him as my dependent? I thought I had it figured out, but my federal withholding is incorrect on my paychecks. It's way too little.

I am trying to maximize my tax refund and not owe next year.  Should I even update the dependent section on my W4 at all? Any suggestions?

[xmasbaby0]

Do you and the other parent have a signed agreement?   If so, the non-custodial parent is the one who is getting the child tax credit and you are not getting the CTC at all, nor are you getting the $500 credit for other dependents.

Are you the custodial parent?  Do you have an agreement with the other parent to allow the other parent to claim them--due to divorce or that you live apart and share custody?  Did one of you sign a Form 8332?

If there is a signed 8332 then the custodial parent retains the right to file as Head of Household, get earned income credit and the childcare credit.  The non-custodial parent gets the child tax credit for children under the age of 17.  If the child is 17 or older the non-custodial parent gets the $500 credit for other dependents.

If you and the other parent have a signed agreement, you need to indicate in MY INFO that you have such an agreement.

As far as the IRS is concerned, the custodial parent is the one with whom the child spent the most nights during the tax year--at least 183 nights.

[Hal_Al]

As others have stated, if your child is under 17, you get the up to $2000 Child tax credit (CTC) every other year.  You get $0 dependent credit on the alternating years.  You may have to change your W-4 every year. 

You should further be aware that there is a special rule in the case of divorced & separated (including never married) parents. When the non-custodial parent is claiming the child as a dependent/exemption/child tax credit; the custodial parent is still allowed to claim the same child for Earned Income Credit, Head of Household filing status, and day care credit. This "splitting of the child" is not available to parents who lived together at any time during the last 6 months of the year; then only one of you can claim the child for any tax reasons. The tax benefits may not be split in any other manner.

Note in particular that the non-custodial parent can never claim the Earned Income Credit, Head of Household filing status or the day care credit, based on that child, even when the custodial parent has released the dependency to him.

 So, it's a good idea to let the other parent know that you will be claiming those items, as many first time divorced parents are not aware of this rule and may try to claim those items, which will cause the IRS to send out letters.

Ref: https://www.irs.gov/publications/p17#en_US_2017_publink1000170897

Scroll down to "Children of divorced or separated parents (or parents who live apart)"

You can if you are the custodial parent.  The custodial  parent is the parent the child lived with for more than 183 nights in 2024