Who should claim dependents when married filing separately for student loan benefits?

When you're married filing separately, which spouse should claim the dependents can make a significant difference! It's not just about the dependency exemption (which has been suspended until 2026 anyway), but about qualifying for other tax benefits. Generally, the spouse with the lower income might benefit more from claiming the children, especially if they can qualify for credits like the Child Tax Credit. However, with your income levels, you're facing phase-outs on many credits regardless. The Child and Dependent Care Credit requires that the custodial parent claim the child, but unfortunately when filing separately, neither of you can claim this credit - it's only available to couples filing jointly or single/head of household filers. Since you're filing separately for student loan reasons (I'm assuming income-driven repayment plans), it's worth noting that the parent claiming the dependents will have a larger household size for IDR calculations, which could mean lower monthly payments.

I dealt with a similar situation last year and found taxr.ai super helpful for figuring out the optimal way to file. We were also doing married filing separately because of student loans, and I wasn't sure who should claim our son. I uploaded our previous tax documents to https://taxr.ai and it analyzed our specific situation, showing which arrangement would save us the most money while keeping the student loan payments manageable. It showed the exact impact on both our taxes and the IDR payment calculations, which was eye-opening.

I wanted to update after trying taxr.ai for my situation. It was actually really helpful! I uploaded our last year's returns and income info, and it showed that my husband (lower earner) should claim both kids because he can still get partial Child Tax Credit while I'm completely phased out. The tool showed we'd save $1,740 in total between taxes and student loan payments by having him claim both kids. What was nice is it showed exactly how my IBR payment would be affected by household size too. Much faster than manually testing different scenarios.

If you're filing MFS for student loan reasons, you're probably in an income-driven repayment plan. The struggle is real trying to get updates or information from the loan servicers - trust me, I know! I spent WEEKS trying to get through to my servicer to verify how my tax filing would affect my payment calculation. After multiple failed attempts and hours on hold, I used Claimyr to get through to them instantly. You can see how it works at https://youtu.be/_kiP6q8DX5c - it's basically a service that navigates phone trees and waits on hold, then calls you when a human picks up. I used https://claimyr.com and got through to my loan servicer in about 20 minutes instead of the 3+ hours I wasted before.

Ok I need to eat my words. After posting my skeptical comment I decided to try Claimyr anyway out of desperation. I had been trying to reach FedLoan for literally 2 months about how claiming my kids would affect my PAYE calculation. Usually I'd get disconnected after an hour on hold. I used the service this morning and got through to an actual loan specialist in about 40 minutes. They confirmed that claiming dependents DOES reduce my monthly payment calculation by increasing my household size. Just wanted to update since this directly relates to the original question about which spouse should claim kids when filing separately.

One thing nobody's mentioned yet - if you're married filing separately, whoever claims the kids can potentially file as Head of Household instead if they meet the requirements (like if the kids lived with you more than half the year and you paid more than half the cost of keeping up the home). Head of Household filing status has better tax rates than Married Filing Separately. Worth looking into!

For the student loan aspect - which I'm guessing is why y'all are filing separately - make sure you really run the numbers! Sometimes the tax benefits of filing jointly outweigh the student loan payment savings. My wife and I were in a similar boat (about 220k vs 85k incomes) and we found that we saved more overall by filing jointly and just paying the higher loan payment. Totally depends on how much debt, interest rates, and how close to forgiveness you are though.

Great question! As someone who's navigated this exact scenario, here are the key factors to consider: **Tax Credits:** With your income levels, you'll want to calculate who can still qualify for the Child Tax Credit. The phase-out begins at $200k for single/MFS filers, so your spouse at $98k would likely get the full $2,000 per child credit, while you might be partially or fully phased out. **Student Loan Impact:** This is huge! Whoever claims the kids will have a larger household size for IDR calculations, which typically means lower monthly payments. Given that your spouse is the one with student loans, having them claim the children could significantly reduce their monthly obligation. **Head of Household:** Since you lived together, neither of you can file as Head of Household, so you're both stuck with MFS rates. **My recommendation:** Have your spouse claim both children. They'll likely get better tax benefits due to income limits, AND it will help with the student loan payments by increasing their household size for IDR purposes. Definitely run the numbers both ways to be sure, but in most cases with your income split, the lower earner claiming dependents works out better overall when you factor in both tax savings and loan payment reductions.