Once a divorce is finalized, a determination must be made for who will claim any tax credits relating to children that the couple had. Only one parent will be eligible to claim all of the credits. That means that credits, such as the Earned Income Tax Credit and dependency exemptions cannot be split between both parents. Whichever parent can claim the EITC must also claim the dependency exemption and the child tax credit, as well as any other relative tax breaks. In most cases, the right to claim these credits goes to the custodial parent, the may also qualify to use head of household status.
One exception to the custodial parent rule applies to divorced couples who live separately for the last six consecutive months during the tax year. The custodial parent has the option of forgoing their right to claim tax credits for the child, allowing the other parent to do so if qualified.
Regardless, the dependent care credit must only be claimed by the parent one that dependent lives with. In most cases, the custodial parent is the only one who can claim the EITC, because of the stipulation that says a child must live with the taxpayer for six months.
Custody, in terms of taxes, is determined by the amount of nights the child spends in the home, or the total amount of nights a parent was considered responsible for the child’s care.