Al and Janice are divorced and have a child, Susan, age 12. The divorce decree specifies that Al and Janice have joint custody of Susan.

Dependency Susan – The qualified child rules specify that the child must have the same principal residence as the taxpayer for more than one half of the year. It may be difficult and argumentative to determine which parent had custody the longer period during the year.  However, for a practical matter, either parent can claim Susan, but not both.  So a problem arises if they both attempt to claim Susan, in which case the qualified child rules specify if more than one parent claims the child as a qualifying child and the parents don't file a joint return together, the child is treated as the qualifying child of:

For purposes of determining who had custody for the greater portion of the year, custody for a specific day is determined by where a child slept that night (there are some elaborate rules relating to determining where a child slept that are included in Chapter 1.01). Any rational individual understands it is virtually impossible for a child to reside with both parents equally. But try telling that to some divorced parents. Remember that someone else is preparing the other parent’s return and making the same decisions as you.

Filing Status Parents – For either of the parents to qualify for head of household (HH) filing status they would have to pay for more than one-half of the cost of maintaining as his or her home a household which is the principal place of abode for more than one-half the year for a qualified person. A qualified person generally includes a qualified child (in this case Susan). So the HH goes to the one that did have physical custody for over half the year. Here again, in joint custody cases, where both parents believe they had the child over half the year, they both may attempt to file as HH.

Other Issues – Child tax credit, EITC, and childcare credit can only be claimed by the parent who had custody for the greater portion of the year.