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Possibly.
First, you have to claim a qualifying person. A qualifying person is a child dependent who lived in your home more than half the year. If you only separated after July 1, then each child lived in both your homes for more than half the year (since for much of the year, it was the same home). You can each claim a child as a dependent and they qualify you for HOH. However, if you have been living separately longer, then you need to determine whether the child(ren) slept in each parent's home at least 183 nights of the year (more than half the nights). If the children lived mostly with one parent and did not spend 183 in the home of the other parent, then that parent can't use them as qualifying children for HOH even if you have an agreement that allows you to share the dependent exemption. (The dependent exemption and child tax credit can be transferred by agreement but qualifying for HOH always stays with the parent who had physical custody more than half the nights of the year.)
Then, you have to pay more than half the cost of keeping up your home where the qualifying person lived. You consider "your home" over the entire year--did you pay more than half the cost. Suppose each parent is paying 100% of the cost of keeping up their post-separation home. You still need to look at who supported the home when you were living together, and the total costs of the household pre- and post-separation, and determine whether each parent paid more than half the overall total of their home costs for the year. So it will depend on when you separated and what your housing costs actually were.
We have two children and the divorce agreement states that I will file using both children for tax deduction purposes. My ex wife wants to use one child to qualify for head of household. If she does so will I still be able to claim the tax deduction for both children?
If each divorced parent can claim ne of the two children and qualify for HoH, can one parent still claim BOTH children as tax deductions?
Can one parent claim both children as tax deductions even if both parents file as head of household?
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.
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.
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