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which parent should claim child on taxes to get more money

For the biggest overall tax benefit, the “right” parent to claim a child is usually the custodial parent or, if time is perfectly 50/50, the parent who can use the credits the most (often the one with the higher but not “too high” income).

Which parent should claim a child on taxes to get more money?

1. Big picture: only one parent can “win” per year

  • Only one parent can claim a child as a dependent in a given tax year if they are not filing a joint return.
  • Trying to “double dip” (both parents claiming the same child) will trigger IRS matching and one claim will be disallowed.
  • Parents can agree between themselves who will claim the child, but that agreement must still follow IRS rules about custody and, when needed, a signed release form.

2. IRS tiebreaker rules: who is allowed to claim?

First question is not “who gets more money?” but “who is legally allowed to claim?” If parents don’t live together or are divorced/separated:

  • The custodial parent (the one the child lives with more nights in the year) is generally the one who can claim the child.
  • If the child spent more nights with one parent, that parent is the custodial parent.
  • If the child spent exactly equal nights with both parents, the IRS treats the custodial parent as the one with the higher Adjusted Gross Income (AGI).

If parents live together but file separate returns:

  • You can choose which parent claims the child.
  • If both try to claim, the IRS again uses time with the child and then higher AGI as tie‑breakers.

If the non‑custodial parent will claim the child, the custodial parent usually must sign Form 8332 (release of claim).

3. Where the money really comes from

The “more money” question is about which parent can actually use the tax credits and status tied to the child. Typical benefits tied to claiming a child include:

  • Child Tax Credit (CTC) – reduces tax owed, but phases out at higher incomes.
  • Earned Income Tax Credit (EITC) – very valuable for lower‑to‑moderate income workers with children; phases out as income rises.
  • Head of Household filing status – can lower tax rate and increase standard deduction for the custodial parent.
  • Child and Dependent Care Credit – if paying for daycare or similar so you can work.

Important split if custodial parent releases the child to non‑custodial parent:

  • Non‑custodial parent who receives the release can typically claim: Child Tax Credit only.
  • Custodial parent keeps : Head of Household, EITC (if eligible), and Child and Dependent Care Credit. These cannot be “given away” with the form.

So “who gets more money” isn’t always the same person for every credit. Often, letting the custodial parent keep the dependency for EITC and Head of Household is worth more than shifting the Child Tax Credit.

4. When higher‑income vs lower‑income parent should claim

Here’s a simple rule of thumb, assuming both parents are legally allowed to claim and can choose:

Often better for the moderate‑income / slightly higher‑income parent

  • If both parents are eligible for the Child Tax Credit, the one with enough income to owe some tax but not too high to phase out might get the most dollar benefit.
  • With 50/50 custody and equal nights, the IRS default is the parent with the higher AGI , and that is often the parent who will claim the child anyway.

Sometimes better for the lower‑income parent

  • If the higher‑income parent makes so much that credits phase out or lose value (for example, very high income where the child‑related benefits are minimal), and the lower‑income parent qualifies for EITC and full credits , the lower‑income parent may get more real money back.
  • Example: An extremely high‑earning parent might get little or no Child Tax Credit benefit, while a lower‑earning parent could receive thousands via EITC plus Child Tax Credit.

When a parent’s income is too low

  • A parent with very low or no earned income might not get much benefit because credits like EITC require earned income and some credits only offset tax that doesn’t exist.
  • In that case, it may be smarter for the parent with steady earned income to claim the child.

5. Practical strategy parents often use

Parents often maximize the total “family pot” and then negotiate how to split it between them. Typical strategies:

  1. Confirm who is allowed to claim first.
    • Identify the custodial parent by nights.
    • If 50/50, note who has the higher AGI (the IRS default).
  1. Roughly estimate each parent’s benefit (with a tax calculator or software):
    • Run a mock return with Parent A claiming the child.
    • Run another with Parent B claiming the child.
    • Compare total refunds or total tax owed differences.
  1. If the non‑custodial parent would claim:
    • Check that the custodial parent is still okay with losing the Child Tax Credit, and understand they still keep EITC/Head of Household/Child Care credit if eligible.
 * Use **Form 8332** or a court order if needed.
  1. Alternate years when it makes sense:
    • Some parents with close income levels alternate claiming the child in odd/even years to keep it fair, while still staying inside IRS rules.

6. Short illustrative example

Imagine parents share 50/50 custody and can choose who claims:

  • Parent A: Makes a moderate income, qualifies for EITC and Child Tax Credit.
  • Parent B: Makes a much higher income, has phased out of EITC and may get reduced Child Tax Credit.

If Parent B claims the child, they might only see a modest reduction in tax.
If Parent A claims the child, they could receive a large refundable EITC plus the Child Tax Credit, meaning more cash back overall.

In that scenario, the child claimed by Parent A generally means “more money” in total, even though Parent B earns more.

7. Mini FAQ

Can both of us claim the child for “different parts of the year”?
No. Only one taxpayer can claim a child per tax year, even if the child split time between both homes.

Can we split credits (one takes EITC, other takes Child Tax Credit)?
Not exactly. When the custodial parent releases the child to the non‑custodial parent, only the dependency/Child Tax Credit moves; EITC, Head of Household, and Child & Dependent Care remain with the custodial parent.

What if the other parent claimed the child without permission?
The IRS will eventually decide based on custody (nights with child) and income rules; the custodial parent generally wins. You may need to file correctly and possibly mail in documents.

8. Simple rule you can remember

  • First , figure out who the IRS says can claim the child (custodial parent, or higher AGI in a perfect tie).
  • Then , see whose income level makes the child‑related credits and Head of Household status actually worth more in dollars.
  • Finally , if you’re allowed some flexibility (like joint custody with cooperation), pick the parent whose return gets the largest combined benefit and work out a fair arrangement between you.

Information gathered from public forums or data available on the internet and portrayed here.