If you have custody of your child or children, you can claim them as dependents. If you and the other parent share custody, the parent who spends the most time with the child can claim them as dependents. However, even if you do not have custody, you might be able to claim a child as a dependent in an agreement with your former spouse or partner.
Custodial Parent vs. Noncustodial Parent
The custodial parent gets to claim dependents for income tax purposes. According to the Internal Revenue Service, a custodial parent is the parent who spends the greater number of nights with the child during the tax year. If you and the child's other parent have joint custody and the child spends the same number of nights with both of you, the parent with the higher adjusted gross income is considered the custodial parent. A noncustodial parent may claim dependents if the custodial parent declares in a written statement that he is not claiming the dependents. If both the custodial parent and noncustodial parent try to claim a dependent, the IRS may ask both of you to submit proof of entitlement.
To qualify as a dependent, a child must have lived with you for at least six months of the tax year and depend on you for at least half of his financial support. The child must be under 19, under 24 and enrolled as a full-time student or any age if he is permanently disabled.
Exemptions and Credits for Dependents
The custodial parent is allowed to claim one exemption per dependent. In 2012, this exemption is worth $3,800. The parent can also claim the Child Tax Credit and the Earned Income Tax Credit; both credits require you to have earned taxable income and they depend on your number of qualifying children. The EITC starts to phase out after you've reached a certain income limit.
Child Support and Alimony Payments
If you pay alimony as mandated by a divorce or separation agreement, you can deduct alimony payments on your tax return. Child support, however, is not considered taxable income, and the payer cannot deduct it on a tax return.
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