All Things Tax

All Things Tax

Like the title says, from the filing process and tax questions to tax policy and reform, you can search and share All Things Tax here. This is the place to find answers to all your general questions that don't fall under the other categories. And just a reminder: questions about software or online filing should be posted in DIY Products.

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Valued Pioneer
Posts: 3
Registered: ‎01-24-2018

Divorce and Child Care

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?

 

Second question:

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.

 

 

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Trusted Council Member
Posts: 6,191
Registered: ‎02-23-2016

Re: Divorce and Child Care

Hi CrysGo13,

 

 

 

 

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:

  1. If your divorce was finalized before December 31st, 2008 then the non-custodial parent may attach certain pages of the divorce/custody agreement to his or her tax return and claim the child without permission from the custodial parent.
  2. If your divorce was finalized after December 31st, 2008 then the custodial parent must provide the non-custodial parent with a signed copy of Form 8332 in order for the non-custodial parent to claim the child.  Form 8332 releases the child's exemption.

 

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.

 

CUSTODIAL PARENT

  • Always files as a head of household.
  • Always claims the earned income credit.
  • Always claims the dependent care credit.
  • Claims the child's exemption if not allowing the ex-spouse to claim the child.
  • Claims the child tax credit if not allowing the ex-spouse to claim the child.

 

NON-CUSTODIAL PARENT

  • Claims the child's exemption.
  • Claims the child tax credit.
  • Is never allowed to claim the earned income credit for the child.
  • Is allowed to file as head of household only if he or she has a different qualifying person.
  • Is never allowed to claim the dependent care credit for the child.

 

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.

 

Louis,

Senior Tax Advisor (Tampa, FL)

Valued Pioneer
Posts: 3
Registered: ‎01-24-2018

Re: Divorce and Child Care

Thank you so much for your reply.

My ex and I have 2 children together. He is claiming one and I am claiming the other. He pays the Aftercare expenses for both children directly but it comes from my child support as well. My question should have been whether I can claim the child care expenses for the child I am claiming as my dependent? Or do I have to pay out of pocket in order to claim it? And even though he pays directly, can he claim it if he is not the custodial parent? I assumed we would split it half and half on our taxes.

I do pay a portion of tbeir summer camp and other camps so I will claim the amount I have paid directly for those for both children, is that correct?

This all seems so complicated but I am sure once we get the hang of it and do it correctly, it will be easier than we think.
Associate (Pioneer)
Posts: 110
Registered: ‎01-08-2018

Re: Divorce and Child Care

Hello CrysGo13,

 

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.

 

Lawrence,

Tax Research Specialist

Valued Pioneer
Posts: 3
Registered: ‎01-24-2018

Re: Divorce and Child Care

Thank you! So since I didnt pay directly I can't really claim the Aftercare portion at all, correct? Only what I paid directly out of pocket for Camp.

And to clarify, I CAN claim the EITC cor my son even though my ex is claiming him as a dependent? He shouldn't be able to claim head of household for my youngest because he doesn't have either of the children for more than 50% of the time. He gets about 40% of the time with both of them.
Associate (Pioneer)
Posts: 110
Registered: ‎01-08-2018

Re: Divorce and Child Care

Hello CrysGo13,

 

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.

 

Lawrence,
Tax Research Specialist