Can One Parent Claim the Child and the Other Get the Earned Income Tax Credit?

Sometimes it doesn't seem fair, come April 15, for only one parent of a divorced couple to reap all the tax credits and exemptions that come with raising a child. This is especially true if the non-custodial parent has been a generous provider to the child. The IRS has provided legal ways to help both parents benefit from credits, such as the child tax credit and the earned income tax credit.

What is the Earned Income Credit

• The Earned Income Tax Credit is a federal income tax credit for working individuals and families who earn low to moderate incomes. A tax credit can mean a deduction of what you must pay, or in some cases, a tax refund. To receive the EITC, you have to meet certain criteria. One of these can be that you are the custodial parent of a qualifying child. Parents who are married, filing jointly may qualify for the EITC. The custodial parent of a divorced couple may qualify. Parents who are married--yet filing separately--are not eligible.

What is a Qualifying Child

• A qualifying child must be your son, daughter, stepchild, foster child or the descendants of any of these people. A qualifying child can also be your brother, sister, half-brother, half-sister, stepbrother, stepsister or the descendants of these people. In order to qualify, they must be under age 19; under age 24 and a student; or qualify as disabled. A qualifying child must live with you at least six months of the year.

Who Can Claim the Child

• While parents may want to divide the tax benefits between themselves in order to be fair to one another, the tax code does not permit it. Generally speaking, only one parent--the custodial parent--can claim the child as an exemption; for the child tax credit and additional child tax credit; for dependent care expenses and for the EITC. If both parents try to claim benefits, the IRS will have to reject both their tax statements, until it can use its own rules to decide who should get the benefits.

Form 8332

• There is one way to give the non-custodial parent a tax break for the child, however.

  Form 8332 lets a the parent the child lives with most of the time--the custodial parent--release to his or her ex spouse the right to claim the child for a dependency exemption; the child tax credit and the additional child tax credit. The custodial parent can still claim the child for the purpose of the Earned Income Tax Credit. If the custodial parent later wants to revoke that release, he or she would again file Form 8332, which can be found at on the IRS Website.

Tie Breakers

• If both parents attempt to claim the child for deductions only one parent is entitled to, the IRS will apply tie breakers. If the child is the offspring of one parent and not the other, the biological or adoptive parent receives the tax breaks. A custodial parent will receive the benefits over a non-custodial parent. If all other claims are equal, the EITC will go to the parent with the highest adjusted gross income.