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.
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)
on page 32:
https://www.irs.gov/pub/irs-pdf/p17.pdf
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.
