When more than one taxpayer claims the same child in a calendar year, who gets priority based on AGI?

In situations where more than one taxpayer claims the same child for tax purposes, the priority is generally given to the parent with the highest adjusted gross income (AGI). This rule is crucial because it establishes a clear guideline for resolving disputes over dependency claims, which can significantly impact tax benefits, such as the Child Tax Credit and Earned Income Tax Credit.

The rationale behind prioritizing the taxpayer with the highest AGI is grounded in the idea of providing tax benefits to those who are in a better financial position, reflecting their capability to bear the costs associated with raising the child. Consequently, by giving preference to the taxpayer with the highest AGI, the IRS aims to align the distribution of tax benefits with the financial resources of the taxpayers involved.

This structure is essential in maintaining fairness in the tax system, ensuring that benefits are allocated to those who are deemed to be contributing more significantly to the child's welfare or have a stronger financial stake in the child's upbringing. Hence, in cases where multiple parties are in contention over claiming the same dependent, the AGI serves as a deciding factor.