Hi, me and my ex-husband have joint 50/50 custody of our child with NO CUSTODIAL PARENT

[taco8652]

Hi, me and my ex-husband have joint 50/50 custody of our child. We alternate years carrying her as a dependent. We do not have a custodial parent(which is stated in our custody paperwork) and she lives at both of our houses half of the year. I was told that since it is his year to carry her that we both could not file as head of household and that we both could not get the EIC... but turbo tax is telling me that I can.

[LenaH · Accepted solution]

You and your ex cannot both file Head of Household. Only a parent that has a child more than 51% of the year can file as Head of Household because the requirement for that filing status is to pay more than half of your total household expenses and must have maintained your household for your qualifying child during that time. 

If 50/50 custody was maintained, neither parent would qualify as Head of Household. 

In regards to the Earned Income Credit, if the child lived with each parent for the same amount of time: The parent with the higher adjusted gross income (AGI) for the year may claim the child. 

If you can’t claim the qualifying child because of the tiebreaker rules, you may be eligible to claim the EITC with no qualifying child.

Qualifying Child Rules

[macuser_22]

Custodial Parent

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 legal 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 so the child cannot be claimed by either parent). And yes they are that picky.

See Custodial parent and noncustodial parent  in Pub 501

https://www.irs.gov/publications/p501#en_US_2018_publink1000220906

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

The non custodial parent can only claim: (Child would be listed as dependent)
- The child as a dependent
- The Child Tax Credit or credit for other dependents

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.

Note. If you are the non-custodial parent filing your return electronically, you must file Form 8332 with Form 8453, (U.S. Individual Income Tax Transmittal) for an IRS e-file Return. See Form 8453 and its instructions for more details. This must be done within 3 days of your e-filed return being accepted by the IRS.

This does NOT mean that the custodial parent can ignore any Decree or court order allowing the non-custodial parent to claim the exemption - they can be required to issue the 8332 form. They could be required by the court to do so or be in contempt.