Rejected return due to kid's SS being used on my x's filing under daycare cost-2441 Part2. Can we both deduct daycare cost? Legally I claim child as dept. this year.

Only the custodial parent can claim the childcare credit.  If you have a signed Form 8332 with the other parent, the custodial parent retains the right to file as Head of Household, get earned income credit and the childcare credit.  The other parent who is claiming the child can get the child tax credit or the credit for other dependents--whichever one applies to the situation.