The Child Tax Credit (CTC) is a valuable tax benefit available to parents and guardians raising dependent children. It helps reduce the amount of federal income tax owed and, in some cases, even provides a refund. But what happens when parents are divorced, separated, or never married? Can they split the Child Tax Credit between them?
The answer is: No, the Child Tax Credit cannot be split between two parents in the same tax year. The IRS allows only one parent to claim the credit per child, per year. However, there are options and strategies for parents to alternate the credit in different tax years or designate who will claim it. Let’s explore the rules, exceptions, and best practices for parents navigating this situation.
1. What Is the Child Tax Credit (CTC)?
The Child Tax Credit is a tax benefit intended to provide financial relief to families with qualifying children. As of the 2024 tax year:
- The credit is worth up to $2,000 per qualifying child.
- Up to $1,500 may be refundable under the Additional Child Tax Credit (ACTC) if the credit exceeds your tax liability.
- The credit begins to phase out for modified adjusted gross income (MAGI) above $200,000 for single filers or $400,000 for married filing jointly.
To claim the credit, the child must meet specific IRS criteria regarding age, relationship, residency, support, and more.
2. IRS Rules on Who Can Claim the Credit
The IRS allows only one taxpayer to claim a qualifying child for the Child Tax Credit in a given year. This means:
- If the parents file a joint return, they can claim the credit together.
- If the parents are divorced or separated, only one parent can claim the credit per child in a given year.
- Both parents cannot “split” the credit—it’s not allowed to divide the $2,000 benefit or share the refundable portion.
Claiming the same child on two different tax returns can trigger IRS audits or processing delays, and may lead to both claims being denied until the issue is resolved.
3. Who Has the Right to Claim the Credit?
Generally, the parent who the child lived with for more than half the year—known as the custodial parent—has the legal right to claim the Child Tax Credit.
However, the custodial parent may release the claim to the non-custodial parent by completing and signing IRS Form 8332.
Form 8332 Includes:
- A declaration releasing the claim to the exemption and tax benefits for the child
- The years the non-custodial parent is allowed to claim the child
- The signature of the custodial parent
Without this signed form, the non-custodial parent generally cannot legally claim the CTC, even if the divorce decree says otherwise.
4. Can Parents Alternate Years?
Yes. One common strategy divorced or separated parents use is to alternate who claims the child each tax year. This can be done by mutual agreement or as specified in a divorce or custody arrangement.
In this scenario:
- Parent A claims the Child Tax Credit in even-numbered years.
- Parent B claims the Child Tax Credit in odd-numbered years.
- Each parent prepares their return accordingly.
- The custodial parent must still sign and provide Form 8332 in the years the other parent claims the child.
This approach allows both parents to benefit from the credit over time, but not in the same year.
5. What About Multiple Children?
If the parents have more than one child, it may be possible to allocate one child to each parent, allowing both to claim the CTC in the same year—but each for a different child. This method must still follow IRS rules and generally requires one parent to sign Form 8332 to relinquish the claim.
For example:
- Parent A claims Child 1 for tax year 2024
- Parent B claims Child 2 for tax year 2024
This way, each parent can receive the benefit without conflict. But again, no child may be split across two returns.
6. Impact on Other Tax Benefits
Claiming a dependent child may also affect other tax benefits besides the Child Tax Credit, such as:
- Earned Income Tax Credit (EITC)
- Head of Household filing status
- Child and Dependent Care Credit
- Education credits (if applicable)
Only the parent who claims the child as a dependent is eligible for these additional tax benefits. Parents must carefully coordinate to avoid conflicting claims that may be rejected by the IRS.
7. What If Both Parents Claim the Same Child?
If both parents file tax returns claiming the same child for the same tax year, the IRS uses tiebreaker rules to determine who has the right to the child’s tax benefits.
Tiebreaker Priority:
- The parent with whom the child lived for the greater number of nights during the year
- If equal, the parent with the higher adjusted gross income (AGI)
- If neither parent qualifies, the taxpayer with the highest AGI may be able to claim the child
This process may delay refunds and create complications, so it’s best to avoid dual claims and work out arrangements ahead of time.
8. What Happens in Case of IRS Disputes?
If the IRS determines that a dependent was claimed by more than one taxpayer, both returns may be flagged and refunds delayed. The IRS may send a notice requesting documentation such as:
- Proof of residency (school or medical records)
- Custody agreements
- Proof of support
Ultimately, the parent meeting the residency and support criteria will be granted the credit. The other parent may be required to amend their return and repay any incorrectly received refund.
9. Legal and Practical Considerations
Even if your divorce decree specifies who should claim the Child Tax Credit, the IRS rules take precedence. That means Form 8332 is required regardless of what the court order says.
It’s recommended to have a written agreement between parents about tax benefit claims to avoid disputes. Good communication, proper documentation, and adherence to IRS guidelines are key.
10. Conclusion: Coordination Is Key, But Splitting Is Not Allowed
The Child Tax Credit cannot be split between parents in the same year. Only one parent can claim the credit per child per tax year. However, with strategic planning and cooperation, parents can alternate years or assign different children to each parent if applicable.
Understanding the IRS rules, using Form 8332 correctly, and avoiding double claims will ensure compliance and prevent refund delays or penalties. If you’re uncertain about your eligibility or need help navigating a shared custody situation, consult a tax professional for guidance tailored to your circumstances.
