The medical isn't the deciding factor on who will claim your child. If you all live together then you can decide between you which of you will claim him, but you cannot both claim him. The one that claims the child will answer the health insurance questions appropriately.
If you don't live together, then only the custodial parent, the one who has physical custody, has the decision as to who will claim the dependent exemption. That custodial parent can claim the exemption or they can waive the exemption to the noncustodial parent by use of the Form 8332. The noncustodial parent must attach this to their return (it actually gets mailed after the return is accepted by the IRS). TurboTax will give instruction after the questions are answered.
If you and the mother live together then your child becomes the qualifying child of more than one person. Only one person can actually treat the child as a qualifying child to take all of the following tax benefits (provided the person is eligible for each benefit). Check the return for each of you and see who benefits the most.
- 1. The exemption for the child.
- 2. The child tax credit.
- 3. Head of household filing status.
- 4. The credit for child and dependent care expenses.
- 5. The exclusion from income for dependent care benefits.
- 6. The earned income credit.
You can make an agreement that only one of you claims the child or under the Tie-Breaker Rules the IRS will treat the child as the qualifying child of the parent with whom the child lived for the longer period of time during the year. If the child lived with each parent for the same amount of time, the IRS will treat the child as the qualifying child of the parent who had the higher adjusted gross income (AGI) for the year.
Remember the IRS only uses their decision making power if you can't decide between you and you both claim the child.
