If you are the custodial parent, then you are the one who should be claiming the child. If you both claim the child on your respective returns, this will trigger an audit and the IRS will end up rewarding the deduction to you because the child lived with you.
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Unless your daughter's daddy has paid at least half of your daughter's living expenses and has a Form 8332 signed by you, your daughter's daddy's dependency exemption should be disallowed. However, its common for the first to file with the child's social security number to get the exemption, and only upon the IRS catching the second tax return claiming the child, will he be asked to refile, and both of you may have to provide proof of who is entitled to the exemption. Note that if he illegally claimed the exemption and refuses to refile/amend, the IRS may assert penalties and charges of fraud if appropriate.
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If you are entitled to the deduction you should claim it. If he already efiled then your return will be rejected as an efile. Therefore, you will need to paper file the return. Since you are the custodial parent you will be entitled to the deduction so long as you do not provide him with a Form 8332 releasing the deduction to the non-custodial parent.
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