Hey. i'm Not On My Daughter's Birth Certificate. But May i Still Claim Her On My Taxes? i Have Stable income, But She Lives With Her Mother. i Pay Her Mother $400 a Month And Take Care Of Anything Ext

[kj863]

Help Please.

[Critter · Accepted solution]

Just a word to the wise ... get that paternity situation fixed sooner rather than later to minimize the long term effects to all involved. 

There is no such thing in the Federal tax law as 50/50, split, or joint custody.  The IRS only recognizes physical custody (which parent the child lived with the greater part, but over half, of the tax year.  That parent is the custodial parent; the other parent is the noncustodial parent.)

Who can claim the exemption and credits depends on who is the custodial parent. (By the IRS definition of custodial parent for tax purposes - this is not the same as the custody that a court might grant.).

The test that the IRS uses to determine the custodial parent is where the child lived for more than 1/2 (or greater part) of the year. The IRS will go so far as to require counting the nights spend in each household - that person is the custodial parent for tax purposes (if exactly equal and more than 183 days - The custodial parent is the parent with the highest AGI, if less than 183 days then neither parent has custody). That can usually only occur if both parents lived with the child at the same time.   And yes they are that picky.

See Custodial parent and noncustodial parent  under the residency test in Pub 17
https://www.irs.gov/publications/p17/ch03.html - en_US_2015_publink1000170891)

The custodial parent may claim everything child related  UNLESS they waive the dependency exemption to the non custodial parent via a form 8332.... in that case the child may be used on 2 separate returns but only in the following way :

Only the Custodial parent can claim: (Child would be listed as non-dependent EIC & CC only)
-Head of Household 
-Earned Income Credit
-Child Care Credit

The non custodial parent can only claim: (Child would be listed as dependent)
-The Exemption
- The Child Tax Credit

See Special rule to divorced or separated parents (or parents who live apart).
https://www.irs.gov/publications/p17/ch03.html - en_US_2015_publink1000170897

But only if specifically specified in a pre-2009 divorce decree, separation agreement or the custodial spouse releases the exemption with a signed 8332 form - after 2009 the IRS only accepts a signed 8332 form that must be attached to the non-custodial parents tax return.

[Hal_Al]

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.

[Opus 17]

 Generally, the deciding factor in who can claim a child dependent is where does the child physically live more than half the year. If the child lives with the other parent for more than half the nights of the year, then the other parent is the only person who is automatically entitled to claim them as a dependent, regardless of how much support you provide.  Before you could claim the child as a dependent, you would have to receive a signed release form from the other parent.