How can a non married father who keeps his daughter 50% of the time file the child care credit on his tax return? He pays all day care expenses. 10,000$.

[Mrsmffi422]

My son has a daughter (3). He and mother were unmarried when she was born. Mother claimed her first year, he claimed her 2nd. The mother stopped working this past year and my son has more income this year. He has her 50-51% of the time and pays probably 75% of her expenses including all her child care expenses which totaled $10,100 this year. How can he claim the child care if mother claims the child as the dependent this year. She has told him she will file early and is going to file her as a dependent regardless of reason.

[DoninGA]

Whomever has the child for 183 nights or more in the year is the custodial parent and can claim the child as a dependent on their tax return and the child tax credit on their tax return.

If the same child is claimed as a dependent on two separate tax returns, the IRS will start an investigation within a year after receiving the returns.  The loser of the investigation will have to pay back any refund associated with the child as a dependent plus penalties and interest.

[Bsch4477]

If it cannot be documented that one parent kept the child for more nights than the other one, the IRS would allow the parent with the higher AGI to claim the dependency. The amount of money spent on the child is not relevant. If the other parent files first your son would have to mail his return. The IRS would sort it out but it will be a mess requiring many months. The one who shouldn’t have claimed the child would have to give back any ill gotten refund and pay interest. Hopefully if this is explained to the other parent they will change their mind. 

[xmasbaby0]

You mentioned that the child's mother does not work.   If she has no income from working, she will not be eligible for any refundable child-related credits.  Without income from working she does not get the additional child tax credit, earned income credit or childcare credit.  

[Hal_Al · Accepted solution]

Q. How can a non married father who keeps his daughter 50% of the time file the child care credit on his tax return?

A. The only way he can do that is if he claims to be the custodial parent and the mother does not.  Basically the parents must agree on who is the custodial parent for the year.

For tax purposes, there is no such thing as joint custody, regardless of what their legal agreement says. The requirement, to be custodial parent, is that the child live with the parent MORE than 50% of the time. One of them has to be the custodial parent and the other the non-custodial parent. The IRS goes by physical custody, not legal custody. 

It is allowed  for you to arrange the child's schedule so that the child spends more than half the year with the father one year and more than half with the mother  the next year, so that you are each the custodial parent in the year you claim the child, so that you can claim full benefits.

In the rare case (could probably only happen in a leap year like 2024), where the time that  each parent has the child is exactly equal, then the parent with the higher income (AGI) is the custodial parent, for the purpose of determining who has first priority on claiming the child as a dependent. But then neither parent can claim a Qualifying Child dependent, for some tax benefits because neither parent had the child the required MORE than half the year. (no earned income credit,  based on that child, and the child would not qualify the parent for Head of Household filing status or the day care credit).

 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.