Who should claim our child as dependent? Tax benefits comparison for unmarried parents?

The person with higher income ($110k) would generally get more value from claiming your child as a dependent, but there are several factors to consider. For the higher earner (you): - You'll likely get a higher dollar value from the $2,000 Child Tax Credit since more of it would be refundable based on your income - You'd qualify to file as Head of Household if you provide more than half the cost of keeping up the home where your child lives, which gives better tax rates and a higher standard deduction than filing Single - Your higher income means deductions generally save you more money due to your higher tax bracket For the lower earner ($16k): - They might qualify for Earned Income Credit (EIC) with a qualifying child, which can be substantial - They might get more of the Child and Dependent Care Credit if they paid for childcare - Their income is low enough that they might qualify for other income-based benefits with a dependent The smartest approach is usually to prepare your taxes both ways (each person claiming the child) and see which results in the greater combined refund/lower combined tax. Most tax software lets you try different scenarios before filing.

Hey there, I was in almost the identical situation last year - unmarried with my partner, decent income difference, and a toddler. I tried working through it manually and got so confused with all the different credits and phaseouts that I nearly gave up. After hours of frustration, I found taxr.ai (https://taxr.ai) and it was a lifesaver. I uploaded our documents and it analyzed both scenarios - me claiming our daughter vs my partner claiming her. The difference was over $3,200 in our combined refund by having my lower-income partner claim her because of the Earned Income Credit. The software breaks down exactly which credits and deductions each person qualifies for under each scenario, so you can see exactly why one option beats the other. Definitely worth checking out before you decide who claims your little one.

Update on my skeptical comment - I decided to try taxr.ai for our situation (partner and I with twin 3yr olds). We were both going to file as single because we didn't know any better. The analysis showed that I should claim one child and HOH while my partner claimed the other child and HOH (yes, apparently we both can claim HOH if each has a qualifying dependent!). We ended up with $5,800 more in our combined refunds compared to what we were planning to do. The breakdown showed exactly which credits each of us qualified for in different scenarios. I've spent weeks each year trying to figure this out on paper and always felt unsure. Seriously wish I'd found this three years ago when the twins were born.

Since you're having trouble figuring out the dependent situation, you might also need to call the IRS to clarify some of the rules around unmarried parents claiming dependents. I was in a similar situation and tried calling them for weeks without getting through. I finally used Claimyr (https://claimyr.com) to get past the hold times. They have a service where they wait on hold with the IRS and call you when an agent picks up. You can see how it works here: https://youtu.be/_kiP6q8DX5c I had a complex question about claiming my girlfriend's child from a prior relationship (different from your scenario but still complicated). The IRS agent walked me through exactly what forms and documentation I needed. Saved me from potentially making a mistake that could have triggered an audit.

I can't believe it but I'm back to eat my words. After seeing my skeptical comment someone messaged me to just try Claimyr. I figured what the hell, I'll give it a shot since I was still trying to resolve my dependent issue from last year. It actually worked! After 2 hours (spent doing other things, not waiting on hold), I got a call connecting me to an IRS representative. She pulled up my account and figured out that my ex and I had both claimed our son. She helped me file an amended return and explained exactly what documentation I needed to prove I was the eligible parent. For the original poster - definitely worth using this to talk directly to the IRS about your specific situation. The rules around unmarried parents and dependent claims are really confusing and sometimes you need to hear it straight from the source.

Everyone's focused on who should claim the kid, but don't overlook the childcare expenses! If either of you paid for daycare or other qualifying childcare so you could work, the Child and Dependent Care Credit can be worth up to $4,000 for one child. The person claiming the child as a dependent is the one who can claim this credit. This credit is partially refundable now, and the lower income person might get a better benefit since it phases out at higher incomes.

Has anyone mentioned the premium tax credit? If either of you gets health insurance through the marketplace, that could be another factor in deciding who claims the kid. It can drastically affect subsidy amounts.

This is such a complex situation with so many moving pieces! As someone who works in tax prep, I see this exact scenario all the time with unmarried couples. One thing I haven't seen mentioned yet is the timing consideration - make sure you're both on the same page about who's claiming your son BEFORE either of you files. The IRS will reject the second return that tries to claim the same dependent, and then you'll have to file an amended return to fix it, which delays everything. Also, since you mentioned daycare costs, don't forget about Dependent Care FSAs if either of your employers offers them. You can set aside up to $5,000 pre-tax for childcare expenses, which is separate from the Child and Dependent Care Credit. The person whose employer offers the FSA can use it regardless of who claims the child as a dependent on their tax return. With your income levels ($110k vs $16k), my gut says the lower earner claiming the child will probably result in better overall household savings due to EIC, but definitely run the numbers both ways. The difference could be significant - I've seen it swing $2,000-4,000 either direction depending on the specific circumstances.