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Divorced and Separated Parents and the EITC Credit

Authored By: Legal Aid Services of Oklahoma, Inc. LSC Funded
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FAQ

If parents are divorced, may the noncustodial parent claim the dependency exemption and the dependent care credit and the custodial parent claim the EITC? +

No.  Generally, only one person may claim all the child-related tax benefits for a child. 

These tax benefits include:

  • the dependency exemption,
  • the child tax credit,
  • the dependent care credit,
  • the exclusion for dependent care benefits,
  • head of household filing status; and,
  • the Earned Income Tax Credit (EITC).

Is there an exception to the "RULE" that only one person may claim all the child-related tax benefits for a child? +

Yes, there is one exception.  It is the special rule for divorced or separated parents or parents who live apart for the last 6 months of the calendar year.  Under this special rule, the noncustodial parent may claim the dependency exemption for a child if the custodial parent releases the exemption.  Also, the noncustodial parent may claim the child tax credit if the other requirements for the child tax credit are met.

Only the custodial parent may claim the dependent care credit.  Usually, only the custodial parent may claim the EITC, because the child must meet the residency test for qualifying child.  The child must live with the parent for more than six months of the year except for temporary absences.

Generally, custody is determined by the number of nights the child slept in the home of the parent or the parent had responsibility for the child for the night.

If divorced parents have joint custody of a child and the marital settlement agreement by the court provides for the parents to alternate claiming the child as a dependentow does this affect the EITC?  Is the parent who is entitled to the dependency exemption also entitled to the EITC if the parent's income warrants it? +

Under the special rule for divorced or separated parents or parents who live apart at all times during the last 6 months of the calendar year, the noncustodial parent may claim the dependency exemption for a child if the custodial parent releases a claim to exemption.

The noncustodial parent may claim the child tax credit for the child but only if the requirements for the child tax credit are met.

Here's an example: A divorced father who is a noncustodial parent, is claiming the Earned Income Tax Credit (EITC) by claiming his son as a "qualifying child."  The child's mother agrees to allow him to claim the credit because his Adjusted Gross Income is higher than that of the mother.  Can they do this? +

The divorced father is probably not properly claiming the EITC. 

If parents are divorced, the custodial parent may release a claim to exemption for a child, which allows the father (the noncustodial parent) to claim the dependency exemption for the child and the child tax credit for the child if the requirements for the child tax credit are met. The child must live with the parent for more than six months of the year except for temporary absences.

To claim the EITC, the child must have lived with the taxpayer in the United States for more than half of the year except for temporary absences.  If the child has not lived with the parent for more than six months of the year, the divorced father may NOT claim the EITC by claiming his son as a qualifying child.

Last Review and Update: Nov 22, 2016