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08-30-2017 01:37 PM
I have two kids 3 and 6 and I am divorce with 50/50 custody. Currently we rotate years to count dependents. Would it be more beneficial to split and have 1 dependent each if I were to get the youngest child?
08-30-2017 02:20 PM
Welcome to the H&R Block community.
In your situation the ages of the kids actually do not matter. Both of the children are young enough that they will both qualify for all of the child-related tax benefits for years to come. In other words, the benefits that the kids will qualify you for will be the same for the foreseeable future, at least for the next six years.
Let's look at the rules for dependents & divorce though because there is actually not a simple answer to this one. Only one parent can claim a child for full benefits after all is said and done, and the other can claim some but not all benefits when allowed to claim the child on their tax return for their years.
In order to claim a child as a qualifying child that child must have lived with you for more than half of the year. The child must also meet four other general requirements:
Since you and your ex-spouse have joint custody you may both meet some or all of the general requirements for a given year. If both parents meet all of the qualifying child requirements then we go through the tie-breaker rules.
What happens in a divorce situation though is that the parent who has the right to claim the kids after all requirements and tie-breakers are taken into account may provide the other parent with Form 8332 which releases the right to claim the children to that parent.
So what you'll have to look at is which one of you is the custodial parent under the tax law and then kind of go from there. More than likely, if the custodial parent's income is within the limits for the earned income credit and the child tax credit then it will be more beneficial for the custodial parent to claim both of the kids, but at the same time claiming one or both of the kids may also benefit the other parent even if their income makes them ineligible for the child tax credit. You have to look at all of the possibilities within the tax law and go with what's most beneficial for you.
If you have any other questions I'll be glad to help.
Senior Tax Advisor (Tampa, FL)