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01-24-2018 07:45 AM
I can't seem to get a straight answer from the IRS and was hoping that maybe you had some more knowledge on specifics when it comes to divorce.
First question is:
If my ex is able to claim my youngest son as a dependent, per our MSA, even though he has him less than 50% of the time, am I still able to claim him for the EITC since I do have him more than 50% of the time?
Instead of us both paying for aftercare, child support shows him being credited for paying it but it is deducted in a sense from me as well. Can we both get credit for the portion for our respective "dependents" that we are claiming or is he the only one who can be credited for it since he is the one who pays the aftercare directly? I've had differing opinions on this and I want to make sure I am doing it correctly.
I am filing online through Taxcut and this is the first time I am having to deal with the divorce issues.
01-24-2018 02:17 PM
Welcome to the H&R Block community.
This is one of my areas of expertise and I'll be glad to provide you with all that you need to know about divorce & the tax law.
The first and most important rule is that the tax laws & regulations trump a divorce agreement every time. That's why I'm going to go over quite a few of them with you.
Let's start by determining who the custodial parent is. The custodial parent is the parent with whom the child lives for at least half of the year and for the majority of the nights during the year. Since your son lives with you more than 50% of the time, which also means that he must have lived with you for more than half of the year, you are the custodial parent.
The non-custodial parent may only claim the chid under certain circumstances. There are two possibilities depending on when the divorce was finalized:
So since this is the first time you have had to deal with divorce issues at tax time I am assuming that you were divorced after December 31st, 2008. Therefore your ex-spouse cannot claim your son unless you provide him with a signed copy of Form 8332.
The next thing we have to look at is how the benefits are split up when the non-custodial parent is allowed to claim a child. You had actually asked about some of the benefits such as the earned income credit.
So as the custodial parent you will always claim the EIC and the dependent care credit, and you will always file as a head of household for as long as you qualify and you're not married. In years when you allow your ex-spouse to claim the child's exemption you will need to enter the child on your tax return as a non-dependent (a dependent whose exemption you are not claiming because your ex-spouse is claiming it).
You said that you paid dependent care expenses "in a sense". Did you actually pay the daycare costs for you son? You have to have actually paid those costs out-of-pocket in order to get credit for them.
If you have any other kids that you have the same situation with because of this divorce then these rules apply to them as well.
If you have any other questions I'll be glad to help.
Senior Tax Advisor (Tampa, FL)
01-24-2018 02:27 PM
01-30-2018 06:42 PM
In your situation, where you claim one child and the ex-spouse claims the other child, thus resulting in both of you being eligible for the Head of Household filing status, according to IRS Topic 602 - Child and Dependent Care Credit, "You may be able to claim the child and dependent care credit if you paid expenses for the care of a qualifying individual."
In other words, as LouisH has pointed out, you only claim the expenses that you actually paid. Furthermore, in your situation, you can only claim the paid child care expenses for the dependent care credit on the child that is listed as a dependent on the tax return. In other words, when the taxpayer claims only Child A as a dependent, the taxpayer can only claim the expenses that she paid for Child A for the dependent care credit. When the ex-spouse claims only Child B as a dependent, the ex-spouse can only claim the expenses that he paid for Child B for the dependent care credit. Therefore, any amounts that you paid for the other child that is not listed as a dependent on your return cannot be used for the dependent care credit. The same goes with the ex-spouse for his return.
If you have any other questions, I'll be glad to help.
Tax Research Specialist
01-30-2018 06:55 PM
01-31-2018 12:46 PM
If you do not pay for the aftercare portion at all, you won't claim that portion for the dependent care credit. It's only what you have paid out of pocket that you get to claim for the dependent care credit on your return.
In regards to your second question, because of the unique situation where you claim one child and the ex-spouse claims the other along with the situation regarding the claiming of the expenses for dependent care credit, the EIC, on your tax return, should not be claimed for the other child that is listed as dependent on the ex-spouse's return. In other words, you can only use the child that you are currently claiming for the EIC and you cannot use the other child being used as a dependent on the ex-spouse's return for the EIC. Now, with the clarified info that you provided that the ex-spouse only spent about 40% of the time for both children, then the ex-spouse would only use the single filing status even with the other child being claimed as a dependent.
Tax Research Specialist