I entered all 3 of my children, however I stated that 2 are being claimed by someone else. Why are they showing up on Schedule-EIC

[DanaB27]

Please be aware, if the children lived with you for more than 6 months then you can release the Child Tax Credit but the Earned Income Credit (EIC) and Child and Dependent Care Credit stay with the custodial parent (you). Please see EIC Divorced and Separated Parents for additional information.

[leeloo]

You can only split benefits with a former (or separated) spouse. If anyone other than that, such as a parent or sibling, has the right to claim the child, you are not entitled to EIC or childcare credits.

If you are the custodial parent, you can assign the dependency to your former spouse by using Form 8332

[MichaelG81]

Divorced filers with two minor children?

If you are divorced and have a custody agreement in place between you and your ex-spouse for your two children, the person who can claim these children on their tax return will come down to which person can satisfy the criteria provided by the IRS for claiming a dependent child. Typically, the person with whom the children live with over half the year will be able to claim the dependents on their tax return. But there may be a separate legal agreement stipulating the other parent may claim the children as dependents.

@jen2iffer8

[Hal_Al · Accepted solution]

@jen2iffer8 said "I stated that 2 are being claimed by someone else"

The only time you can do that (enter the kids on your return and let someone else claim them) is when that someone else is the non custodial parent.  In that situation, the non custodial parent can NOT claim EIC, but you still can.  TurboTax is doing it right. 

If it's somebody else (other than the ex) properly claiming the kids, you have to delete them from your TurboTax program.

 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 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

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