The tie-breaker rules apply if an individual may be claimed as a qualifying child by two or more taxpayers, and the taxpayers are unable to agree who will claim the child, OR if the child is claimed by more than one taxpayer and the IRS must step in and determine who can claim the child. The tie-breaking rules are as follows:

• Parent and Other Relative - If only one of the taxpayers who may claim the individual as a qualifying child is the individual's parent  (e.g., where a child lives with his or her mother and grandmother in the same residence), the individual is treated as the qualifying child of his or her parent. (Code Sec. 152(c)(4)(A)(i))

• Parents Not Filing Jointly - If more than one parent may claim 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: (a) the parent with whom the child resided for the longer period of time during the tax year, or (b) if the child resides with both parents for the same amount of time during the tax year, the parent with the higher adjusted gross income. (Code Sec. 152(c)(4)(B)(ii)) However, a child is treated as the qualifying child of the noncustodial parent if the custodial parent releases a claim to the dependency as discussed below.

• Parents Not Claiming – If an individual may be but isn't claimed by either parent, the individual may be claimed as the qualifying child of another taxpayer only if that taxpayer’s adjusted gross income is higher than the highest AGI of any parent of the individual. (Code Sec. 152(c)(4)(C))

In Notice 2006-86 the IRS has indicated that the rule that goes into effect when two or more taxpayers claim a child as a qualifying child must be applied uniformly to all tax provisions that rely on the same definition of a qualifying child. The only exception is where the Code Sec. 152(e) rule for non-custodial parents applies, in which case a child may be the non-custodial parent's qualifying child for child tax credit and dependency deduction purposes and may be the custodial parent's qualifying child for other provisions. (The dependency deduction is suspended for years 2018-2025.)

In other words, except to the extent that the special rule for non-custodial parents applies, when more than one taxpayer may claim a child as a qualifying child, the child is treated as the qualifying child of only one taxpayer for ALL the provisions that employ the uniform definition of a qualifying child: head of household, child and dependent care credit, child tax credit, EITC, and the exclusion for dependent care assistance. The notice says the tiebreaker rules are applied to these provisions as a group, rather than on an IRC section-by-section basis.