The Rules

• The IRS applies its tiebreaker rules in sequential order. First, if you're not both parents to the child, then the IRS immediately rules out the nonparent for the exemption. If both of you are the child's parent, the IRS will then look at which of you the child lived with more during the tax year. Generally, this gives the exemption to the custodial parent; the one who has parenting time only on weekends would lose the exemption. Finally, if your child lived with both of you for the same amount of time, the IRS will give the exemption to whichever of you earned more. This rule would also apply if neither of you is the parent of the child, bot neither of the child's parents wants to claim him as a dependent.
  
  

When Tiebreaker Rules Apply

• The IRS won't intervene and apply tiebreaker rules unless two people submit returns claiming the same child in the same year. If you file your return electronically and your child's other parent has already filed and claimed her, the IRS will summarily reject your return because its computer system isn't set up to calculate the rules. You'd then have to take matters into your own hands, call the IRS and ask them to resolve the dispute by applying the tiebreaker criteria. If you mail in a paper return, however, an IRS agent will automatically review the situation and use the tiebreaker system as soon as he discovers the duplicate exemption. He'll then notify both of you as to who "won" the contest and to which return he awarded the exemption.
  
  

Exceptions

• Your divorce decree can override the IRS's tiebreaker rules if you agree between youselves at the time of your divorce how you're going to handle this situation. For example, you may get to claim your child in all even-numbered years and his other parent would claim him in all odd-numbered years. As long as you file according to this schedule and there's no dispute, the IRS won't get involved. If there is a dispute, the IRS usually defaults to the terms of your decree. If you live together but aren't married -- so you can't file a joint return -- the IRS will allow you to decide which of you takes the deductions for your child. You can also bypass the tiebreaker rules by voluntarily giving the exemption to your child's other parent if you want to. You would need to complete IRS Form 8332 and submit it along with your tax return to do so.
  
  

Tips

• Several additional tax credits and benefits exist if you have a minor child, other than who gets to claim him as a dependent. Usually, the parent who won the tiebreaker will also receive these other credits and advantages, provided she qualifies for them in the first place. In situations involving child tax credits and earned income credits, you would first have to qualify for the credit, then additionally pass the tiebreaker test to receive all of them. The same tiebreaker rules apply to tax credits as to who gets to claim the dependency exemption.