Last year I claimed my daughter. But her father and I have a verbal agreement to alternate years claiming her, and this is now his year to claim her on his taxes. Help?

[KrisD · Accepted solution]

There is Form 8332 that may be used when the child is claimed by the non-custodial parent. This is for situations where the parents are divorced and do not live together. It allows the non-custodial parent (where the child does NOT live more than half the year) to claim the child tax credit. The custodial parent always gets all the other credits (the parent of where the child lives with for more than half the year.)

TurboTax has that issue covered, just answer the interview questions carefully. 

When both parents live together, whether married or not, the child cannot be "split" between the two. The child is the dependent of one or the other. 

[ashleyr112892]

It’s hard to explain our situation. We were never married and split when she was young. We have always been civil and agreed on 50/50 custody without any legal interventions. But we have been alternating years where we claim her. What does that mean when you say we cannot split the child, the child is a dependent of one or the other? Are we doing it wrong?

[KrisD]

You may be doing it wrong, but I'm glad you guys are trying to work together. The truth, as far as the IRS is concerned, there is only one custodial parent, the one the child lives with more than half the year. That parent and that parent alone is eligible for certain credits, like the EIC and filing Head of Household. The custodial parent can give the non-custodial parent the child's exemption, or I now say the child's dependency, since personal exemptions have been suspended, (personal exemptions were amounts that were subtracted from your income before tax). This also allow the non-custodial parent to apply for the Child Tax Credit,  but not the other credits, they always go to the custodial parent. The only way to legally split the benefits each year is if the child stays with one parent for more than half the year, and then the other parent for more than half the year the next year.