If Parents Have Joint Physical Custody, Can Both Claim The Children As Dependents?
That is pursuant to IRS regulations. Only one parent is able to claim the child as a dependent. It's generally the parent who has more than 50% of the custody in every given year. The parents, however, can agree to alternate who claims the child as the dependent if they share 50/50 custody. Or, depending on the income levels of the parents, they can agree that one parent who has the child more than 50% of the time releases the exemption to the other parent. That's a question that is best suited for the party's accountants to figure out if there is going to be a major tax benefit in that reallocation.