Form 8332 and Head of household

[Dependent Dad]

I have a court order where the ex and I are to alternate who can claim the dependent on their respective tax returns. The grey area that comes into play is the Head of Household designation. By IRS rules if we split equal time with child (we do, it would be hard to ascertain who has the kid more), we would then use higher AGI as the deciding factor of who is the custodial parent (in the eyes of the IRS). If I am the custodial parent in the eyes of the IRS, and I file form 8332 -"Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent", can I still claim as Head of Household? Turbo Tax is letting me do this when I am going through the tax preparation process, but just want to make sure I am not violating tax law or my custody order.

[xmasbaby0]

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.

[duzzy6979]

Form 8332 allows the non-custodial parent to claim the child for the child tax credit, additional child tax credit and the credit for other dependents if applicable.

You still get to claim Head of Household and the Earned Income Credits, because your address is the child's residence.

Hope that answers your question

[Dependent Dad]

Well, according to custody agreement we are both equal joint and physical custody. I am making my basis of custodial parent off of the fact that I have an higher AGI ( since we both share the same amount of time with the dependent). According to our parenting plan we will both alternate who gets to claim the dependent, but don’t specify who is the custodial in regards to head of household filling.

[duzzy6979]

According to the tiebreaker rules, the parent with the highest AGI is considered as the custodial parent.

A little side note, whoever claims the child as the custodial parent is always the custodial parent even during the years when the non-custodial parent can claim the child for the child tax credits. 

Hope that helps.