Federal taxes, especially Head of Household requirements

[ellencee]

What is the name of your state? dazed and confused on the forum! Federal Tax Issue

loku
Please help us out on the family law section regarding support, thread title Odd Situation. The issue of Head of Household, especially.

We really need some expert advice and answers. Thanks from all of us over there!
EC

 

[loku]

There are 43 postings at the thread you refer to. That is much too many to go through to find your tax question. If you do have a tax question, please post it.

 

[ellencee]

The original poster, Lady Blue, had tax questions about whether or not her ex's having the tax deduction for their child was going to adversely affect her ability to claim dependent care deductions, EIC, and child tax credit. I think she received the appropriate answer, but it wouldn't hurt to have your opinion on the matter.

as for the rest of it; I wouldn't read it either...usually_lurking and I have regressed to childhood antics and have been throwing sticks and stones. I need to delete mine and save myself further embarrassment!

Thanks for following up on my post to you; I do appreciate it!
EC

 

[eadelman]

I've copied the original question below, then given my opinion.

family law section regarding support, thread title Odd Situation. The issue of Head of Household, especially


The original poster, Lady Blue, had tax questions about whether or not her ex's having the tax deduction for their child was going to adversely affect her ability to claim dependent care deductions, EIC, and child tax credit. I think she received the appropriate answer, but it wouldn't hurt to have your opinion on the matter.


What is the name of your state? Arizona

MY QUESTION IS ACTUALLY TWO FOLD. I DO APPOLOGIZE IF THE ANSWERS ARE OBVIOUS AND I MISS THEM, BUT IF YOU CAN'T HELP, COULD YOU AT LEAST POINT ME IN THE RIGHT DIRECTION?

BIODAD WAS ORDERED IN JAN 2001 TO START PAYING 396 A MONTH OF CHILD SUPPORT. THE ORDER WAS RETROACTIVE TO CHILDS BIRTH IN SEPTEMBER 2000 AS DIVORCE PROCEEDINGS WERE GOING ON DURING PREGNANCY. ANYWAYS, JUDGE AMENDED ORDER TO STATE THAT IF EX 'FULFILLED HIS CHILD SUPPORT OBLIGATION', HE COULD CLAIM HER ON HIS TAXES. HE DID NOT START PAYING SUPPORT UNTIL MAY 2001.

MY QUESTIONS ARE THIS - EX ONLY PAYS 365 A MONTH. OCASSIONALLY, HE WILL SEND AN EXTRA FIFTY OR SO, WHICH THE STATE DEEMS AS 'ARREARS PAYMENT'. SO, DOES THAT GO TOWARD THE TOTAL ARREARS (BETWEEN SEPTEMBER 2000 - MAY 2001 AND THE ADDITIONAL AMOUNT MISSING EACH MONTH) OR TOWARDS HIS ARREARS FOR THIS YEAR ONLY? THE REASON I AM ASKING THIS IS BECAUSE EX'S ATTY HAS STATED EX IS PLANNING ON CLAIMING CHILD ON HIS TAXES THIS YEAR, AND I (CORRECT ME IF I AM WRONG)AM ASSUMING THAT THE ONLY WAY HE COULD DO THAT IS IF HE WOULD HAVE PAID THE FULL AMONT ORDERED EACH MONTH. OR CAN HE JUST MAKE SURE HE HAS PAID ALL ARREARS BY THE END OF THE YEAR AND THAT WILL COUT AS FULFILLING THE ORDER?

According to the above facts, Ex is entitled to the exemption deduction if he “FULFILLS HIS CHILD SUPPORT OBLIGATION.” What that means depends on the exact wording of the Court order. But if the order sheds no more light on what is meant, then most likely the court would interpret it to mean that he pay $396 a month in addition to paying off the retroactive amount due. From what you say, the has not paid the monthly amount each month and he has certainly not paid the retroactive amount due. I would say the court will probably interpret it to mean that he has not fulfilled the obligation, and so he is not entitled to the deduction.

 

[ellencee]

eadelman
Thanks, but the question remains, if he does meet all the requirements, and he does get the child as his deduction, will it or will it not affect her being able to claim dependent care, EIC, and the child tax credit?

 

[roamer5]

Glad to know I'm not the only one who gets weird every now and then.

The custodial parent (CP) is entitled to claim the child as a dependent, unless:

1. The CP signs form 8332 allowing the non-custodial parent (NCP)
to claim the child;

OR

2. The divorce decree "unconditionally" allows the NCP to claim
the child.

Based upon the previous posts, neither of the above applies, which means the CP should be claiming the child as a dependent. Along with that automatically comes the child tax credit. The CP is also allowed the child care credit, assuming she actually paid for it.

If the child lived with the CP more than 6 motnhs and all other conditions are satisifed, then CP gets EIC.

IF the child lived with CP more than 6 months and CP paid more than half the cost of maintaining a home (rent, utilities, etc.) than CP files as head of household.

I'm an income tax preparer and not an attorney.

 

[ellencee]

I am so sorry, and this has nothing what-so-ever to do with the argument over the word "never" with usually_lurking, and has nothing do with Lady Blue's as yet undetermined outcome; but I must ask again...

If the NCP is adjucated, or ordered by the court, to be the person who will, under any and all circumstances, be the parent who claims the child as the dependent on the NCP's income tax form, will it or will it not affect the custodial parent's ability to claim dependent care benefits, child tax credit, and/or EIC?

Please, in answering this question allow me the lattitude of being totally dense on this issue and please do not quote what the IRS says about who can claim the dependent, rather go by the requirement of the court that the NCP claims the child as the dependent and tell me if it will affect the dependent care benefits, child tax credit, and/or EIC. (I cannot ask my brother-in-law; he is not available this weekend.)

In other words, eadelman and roamer5, the court has dictated that the NCP gets the child deduction. Will this, or will this not, affect the CP's ability to claim and benefit from dependent care, EIC, and the child tax credit?

Thanks!

 

[roamer5]

Ok, I hear you. Let's assume the court-ordered decree of the NCP claiming the dependent is considered by the IRS as unconditional.

The NCP automatically gets the child tax credit as that is linked to whoever claims the child as a dependent.

If the CP paid for child care, then the CP gets the dependent care credit (Form 2441), because the only reason she's not claiming the dependent is due to the divorce decree.

None of the above affects the EIC for the CP.

The basic requirements for EIC are relationship, residency, and income.

This stuff gets confusing, so ask away.

I'm an income tax preparer and not an attorney.

 

[ellencee]

Bless you, dear roamer5.

 

[Lady Blue]

*llightbulb*

Ah ha...I see now!!

Thank you very much