Page 35 - 2020 Publication 17

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2. Head of household filing status. You agree to let your mother claim Jane. This the earned income credit or the credit for child
3. The credit for child and dependent care means your mother can claim Jane as a qualify- and dependent care expenses.
expenses. ing child for all of the five tax benefits listed ear- Example 7—Separated parents claim
lier, if she qualifies for each of those benefits
4. The exclusion from income for dependent (and if you don’t claim Jane as a qualifying child same child. The facts are the same as in Ex-
care benefits. for any of those tax benefits). ample 6, except that you and your husband
5. The earned income credit. Example 2—Parent has higher AGI than both claim your son as a qualifying child. In this
case, only your husband will be allowed to treat
The other person can’t take any of these grandparent. The facts are the same as in Ex- your son as a qualifying child. This is because,
benefits based on this qualifying child. In other ample 1, except your AGI is $18,000. Because during 2020, the boy lived with him longer than
words, you and the other person can’t agree to your mother's AGI isn't higher than yours, she with you. If you claimed the child tax credit for
divide these benefits between you. can’t claim Jane. Only you can claim Jane. your son, the IRS will disallow your claim to the
child tax credit. If you don’t have another quali-
Tiebreaker rules. To determine which person Example 3—Two persons claim same fying child or dependent, the IRS will also disal-
can treat the child as a qualifying child to claim child. The facts are the same as in Example 1, low your claim to the exclusion for dependent
these five tax benefits, the following tiebreaker except that you and your mother both claim care benefits. In addition, because you and
rules apply. Jane as a qualifying child. In this case, you, as your husband didn't live apart for the last 6
• If only one of the persons is the child's pa- the child's parent, will be the only one allowed months of the year, your husband can’t claim
rent, the child is treated as the qualifying to claim Jane as a qualifying child. The IRS will head of household filing status. As a result, his
child of the parent. disallow your mother's claim to the five tax ben- filing status is married filing separately, so he
• If the parents file a joint return together and efits listed earlier based on Jane. However, can’t claim the earned income credit or the
credit for child and dependent care expenses.
your mother may qualify for the earned income
can claim the child as a qualifying child, credit as a taxpayer without a qualifying child.
the child is treated as the qualifying child of Example 8—Unmarried parents. You,
the parents. Example 4—Qualifying children split be- your 5-year-old son, and your son's father lived
• If the parents don’t file a joint return to- tween two persons. The facts are the same together all year. You and your son's father
gether but both parents claim the child as a as in Example 1, except you also have two aren't married. Your son is a qualifying child of
qualifying child, the IRS will treat the child other young children who are qualifying children both you and his father because he meets the
as the qualifying child of the parent with of both you and your mother. Only one of you relationship, age, residency, support, and joint
whom the child lived for the longer period can claim each child. However, if your mother's return tests for both you and his father. Your
of time during the year. If the child lived AGI is higher than yours, you can allow your AGI is $12,000 and your son's father's AGI is
with each parent for the same amount of mother to claim one or more of the children. For $14,000. Your son's father agrees to let you
time, the IRS will treat the child as the qual- example, if you claim one child, your mother claim the child as a qualifying child. This means
ifying child of the parent who had the can claim the other two. you can claim him as a qualifying child for the
higher adjusted gross income (AGI) for the child tax credit, head of household filing status,
year. Example 5—Taxpayer who is a qualify- credit for child and dependent care expenses,
• If no parent can claim the child as a quali- ing child. The facts are the same as in Exam- exclusion for dependent care benefits, and the
ple 1, except you are only 18 years old and
earned income credit, if you qualify for each of
fying child, the child is treated as the quali- didn't provide more than half of your own sup-
fying child of the person who had the high- port for the year. This means you are your those tax benefits (and if your son's father
doesn't claim your son as a qualifying child for
est AGI for the year. mother's qualifying child. If she can claim you any of those tax benefits).
• If a parent can claim the child as a qualify- as a dependent, then you can’t claim your
ing child but no parent does so claim the daughter as a dependent because of the De- Example 9—Unmarried parents claim
child, the child is treated as the qualifying pendent Taxpayer Test, explained earlier. same child. The facts are the same as in Ex-
child of the person who had the highest ample 8, except that you and your son's father
AGI for the year, but only if that person's Example 6—Separated parents. You, both claim your son as a qualifying child. In this
AGI is higher than the highest AGI of any of your husband, and your 10-year-old son lived case, only your son's father will be allowed to
the child's parents who can claim the child. together until August 1, 2020, when your hus- treat your son as a qualifying child. This is be-
Subject to these tiebreaker rules, you and band moved out of the household. In August cause his AGI, $14,000, is more than your AGI,
the other person may be able to choose which and September, your son lived with you. For the $12,000. If you claimed the child tax credit for
rest of the year, your son lived with your hus-
of you claims the child as a qualifying child. band, the boy's father. Your son is a qualifying your son, the IRS will disallow your claim to this
credit. If you don’t have another qualifying child
You may be able to qualify for the child of both you and your husband because or dependent, the IRS will also disallow your
TIP earned income credit under the rules your son lived with each of you for more than claim to head of household filing status, the
for taxpayers without a qualifying child half the year and because he met the relation- credit for child and dependent care expenses,
if you have a qualifying child for the earned in- ship, age, support, and joint return tests for both and the exclusion for dependent care benefits.
come credit who is claimed as a qualifying child of you. At the end of the year, you and your hus- However, you may be able to claim the earned
by another taxpayer. For more information, see band still weren't divorced, legally separated, or income credit as a taxpayer without a qualifying
Pub. 596. separated under a written separation agree- child.
ment, so the rule for children of divorced or sep-
Example 1—Child lived with parent and arated parents (or parents who live apart) Example 10—Child didn't live with a pa-
grandparent. You and your 3-year-old daugh- doesn't apply. rent. You and your 7-year-old niece, your si-
ter Jane lived with your mother all year. You are You and your husband will file separate re- ster's child, lived with your mother all year. You
25 years old, unmarried, and your AGI is turns. Your husband agrees to let you treat your are 25 years old, and your AGI is $9,300. Your
$9,000. Your mother's AGI is $15,000. Jane's son as a qualifying child. This means, if your mother's AGI is $15,000. Your niece's parents
father didn't live with you or your daughter. You husband doesn't claim your son as a qualifying file jointly, have an AGI of less than $9,000, and
haven't signed Form 8332 (or a similar state- child, you can claim your son as a qualifying don’t live with you or their child. Your niece is a
ment). child for the child tax credit and exclusion for qualifying child of both you and your mother be-
Jane is a qualifying child of both you and dependent care benefits (if you qualify for each cause she meets the relationship, age, resi-
your mother because she meets the relation- of those tax benefits). However, you can’t claim dency, support, and joint return tests for both
ship, age, residency, support, and joint return head of household filing status because you you and your mother. However, only your
tests for both you and your mother. However, and your husband didn't live apart for the last 6 mother can treat her as a qualifying child. This
only one of you can claim her. Jane isn't a quali- months of the year. As a result, your filing status is because your mother's AGI, $15,000, is more
fying child of anyone else, including her father. is married filing separately, so you can’t claim than your AGI, $9,300.

Chapter 3 Dependents Page 31