Will your return be more for the parent with the higher income of two parents, living together and filing separate, claims the children (2)?

[maryy024]

Trying to weigh the odds between myself, I make less money, or my boyfriend whom makes more, claiming either one or both of our children on his/mine taxes. 

We have a 9 yr old and a 3 year old( with daycare expenses to claim)

[JulieR · Accepted solution]

If you are not married, it is usually more beneficial for the parent with the higher income to claim the children. However, certain credits can be lost if your boyfriend's income is too high.  For example, the child tax credit is limited if your modified adjusted gross income is above a certain amount. The amount at which this phase-out begins varies depending on your filing status. For married taxpayers filing a joint return, the phase-out begins at $110,000. For married taxpayers filing a separate return, it begins at $55,000. For all other taxpayers, the phase-out begins at $75,000. In addition, the Child Tax Credit is generally limited by the amount of the income tax you owe as well as any alternative minimum tax you owe.