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© Hitesman & Wold, P.A. 2019 Cafeteria Plan Summary Description (3-11) 26 4.6 What if two people claim a child as a Qualifying Individual? With the exception of two parents that file income taxes jointly, only one person is entitled to treat the child as a Qualifying Individual. Where multiple people are involved, there are two special rules to determine which person is entitled to treat the child as a Qualifying Individual. (a) Divorced or Separated Parents, or Parents Living Apart. Important Note: In this situation, only one person is entitled to treat the child as a Qualified Individual for purposes of the Dependent Care FSA. If a child’s parents are divorced, legally separated, separated pursuant to a written agreement, or live apart at all times during the last six (6) months of the calendar year, a special rule applies if: (i) the child is under age 13 or is mentally or phys ically unable to care for himself or herself; (ii) the child receives more than 50% of his or her support from the parents (in aggregate); and (iii) the child resides with the parents (in aggregate) for more than 50% of the year. In such situations, the child is the Qualifying Individual of the custodial parent even if the custodial parent has released the right to claim the child as a dependent. The custodial parent is generally the parent with whom the child resides for the greater number of nights during the calendar year or, if the child resides with both parents for an equal number of nights, the parent with the higher adjusted gross income for the year. (b) Other Situations. If the special rule described above regarding divorce, etc. does not apply, other special tie-breaker rules of may apply. If an individual is a Qualifying Individual (under paragraphs (a) or (b) of the definition provided above) with respect to more than one person, then: (1) if both persons are the individual’s parents and they f ile separate federal income tax returns, then the child is the Qualifying Individual of the parent with whom the child resides for the longest period of time during the calendar year (or, if child resides with both parents for the same amount of time during the year, the parent with the highest adjusted gross income for the year). However, if that parent (i.e., the custodial parent or the parent with the highest adjusted gross income) does not claim the child as a qualifying child (as defined in Section 152 of the Internal Revenue Code) for any purpose (i.e., a dependent care expense reimbursement program, the earned income credit, the dependency deduction, the child tax credit, and the dependent care credit), then the child is the Qualifying Individual of t he other parent (i.e., the non-custodial parent or the parent with the lowest adjusted gross income). This is the one person that is entitled to treat the child as a Qualifying Individual for purposes of the Dependent Care FSA. (2) if one person is the individual’s parent and the other is not, the child is the Qualifying Individual of the parent. However, if the parent does not claim the child as a qualifying child (as defined in Section 152 of the Internal Revenue Code) for any purpose (i.e., a dependent care expense reimbursement program, the earned income credit, the dependency deduction, the child tax credit, and the dependent care credit), then the child is the Qualifying Individual of the other person (i.e., the non-parent). This is the one person that is entitled to treat the child as a Qualifying Individual for purposes of the Dependent Care FSA. (3) if neither person is the individual’s parent, the child is the Qualifying Individual of the person with the highest adjusted gross income for the year in quest ion.