What is the one occasion when more than one individual can claim different tax benefits for the same child?

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The key idea is that who can claim a child for tax benefits can diverge in a divorce situation. Under the special divorced rules, the noncustodial parent may claim the child as a dependent for certain tax benefits if the custodial parent releases the claim (typically with Form 8332). At the same time, the custodial parent can still use the child as a qualifying child for other benefits, such as Head of Household, provided the child lived with them for more than half the year and other requirements are met. This creates a scenario where two different taxpayers can derive different benefits from the same child. The other situations don’t allow this split: typically only one taxpayer claims the child for a given benefit, and tie-breaker rules determine eligibility if both parents try to claim the child as a dependent for the same benefit. The two-step arrangement—noncustodial claiming a dependent under divorce rules while custodial claims HOH or other benefits—is the one occasion this overlap happens.