Recently Divorced: Child Tax Credits and Dependency

After divorce, determining who claims dependent children becomes a tax planning decision. Child tax credits, education credits, and Head of Household status all depend on this choice.

Three credits, two different rules: The child tax credit ($2,200/child) follows whoever claims the child as a dependent. The child and dependent care credit (CDCTC) and the earned income tax credit (EITC) follow the custodial parent -- the one with whom the child spent more nights. These rules do not change even when Form 8332 releases the dependency claim to the other parent.

The custodial parent always keeps EITC and CDCTC: If you are the custodial parent and sign Form 8332 to let your ex claim the child tax credit, you still keep eligibility for EITC (worth up to $4,427 with one child in 2026) and CDCTC. Many people do not realize this split exists.

Tiebreaker rules when custody is truly 50/50: If the child spends exactly equal nights with each parent, the IRS breaks the tie using adjusted gross income -- the parent with the higher AGI is treated as the custodial parent for tiebreaker purposes.

The pitfall: Divorce decrees often say one parent "gets" all child-related credits, but the IRS does not honor that language. Credits are governed by federal tax law, not state court orders. Both parents claiming the same credit creates duplicate filing issues that delay refunds and trigger correspondence audits.