If Unmarried, Who Claims the Child on Income Taxes?

You must use Form 1040 or Form 1040A to claim dependents.

You must use Form 1040 or Form 1040A to claim dependents.

When you have a child but you're not married, you can end up fighting over who gets to claim the kid as a dependent. In the same way you can't split a baby in half, you can't split the exemption for claiming the child as a dependent. Instead, the Internal Revenue Services has a series of tests to determine which parent gets to claim the exemption.

Custodial Parent

The custodial parent usually gets to claim the child as a dependent for the year. The IRS defines the custodial parent as the parent with whom the child spends the most nights. You count the child as spending the night with you if he either sleeps at your house or spends the night with you, such as if you're on vacation with the child.

AGI Tiebreaker

If the child spends an equal number of nights with each parent, the parent with the higher adjusted gross income is entitled to claim the child on income taxes. Your adjusted gross income equals your total taxable income minus your above-the-line deductions, like moving expenses or traditional IRA contributions. For example, if your child spends 26 weeks with you and 26 weeks with the other parent, you get to claim the child if you have a higher adjusted gross income.

Parental Agreement

If you and the other parent are unmarried and lived apart during the last six months of the year, you may be able to sign an agreement with the other parent agreeing who gets to claim the child. To do so, the child has to receive more than half his support from you and the other parent and the child must spend at least half the year in the custody of both parents combined. The agreement must be a written statement in which the custodial parent agrees not to claim the dependent and the noncustodial parent must attach the statement to his tax return.

Significance

Claiming a child reduces your taxable income by the value of an exemption -- $3,800 as of 2012. In addition, only the parent claiming the dependent qualifies to claim several other tax benefits including the child tax credit. And when it comes time for the child to go to college, only the parent claiming the child can claim a tax break such as the American opportunity credit or lifetime learning credit.

 

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