As you are thinking, it will cause a circular reference , so you will not be able to do this.
Solution
Without further details about the rules and why you need to split the project into "two parts", it's a little complicated to think of a practical solution that fits your project needs. At first and with the little information you put in the question, I can think of two ways to solve this.
1. Leave everything in one project
After all, if you need to use the ProjectA forms in ProjectB and vice versa, why would you worry about leaving them in separate projects? Perhaps there is some rule for this, but as has not been said in the question, we can assume that keeping everything in one project is a better idea than the current one.
2. Create a base project and reference the two projects
In this case, you would create a third project and add references from the other two. There is not much mystery, but it may be unnecessary work and using the first approach is a much better idea.