Who claims child?

[childrenRpeople]

What is the name of your state? CA

A general question...when parents have joint custodies but unequal parental time (for example, mom is with child 75% of time and dad is with child 25% of time), how should/do they usually determine who and how they split claiming the child for tax purposes?
Do parents in such a case usually alternate years even if the time-sharing is uneven?
Please let me know what parents usually do in such circumstances.
Thanks for the insight!-CRP

 

[nextwife]

Yes, many do alternate years, because the parent paying support is STILL contributing toward the financial cost of the child. Also, If one cannot benefit because they have little to no income, they then may let the other take the write off.

 

[childrenRpeople]

Ohhh...

...that's why I love these forums...I am introduced to perspectives that I didn't see so easily before.
I thought that the parent who houses the child most of the time claims the child.
But am I understanding that it has more to do with overall costs (time and financial) rather than just the predominant living arrangement?

Is it more equitable for both parents to be able to share who claims the child even if time-share is uneven?

 

[eyegots1]

Absent a court order, only the custodial parent has the right to claim the child/ren. The custodial parent can sign a form allowing the non custodial parent to claim the child/ren on alternating years if they agree to that or a judge can order it. But until there is an agreement and signed form or a court order, only the CP may claim the deduction.

 

[haiku]

the tax deduction itself, is of most benefit financially to the parent who makes the most money. If a parent makes less than 15,000 dollars a year, they can take the deduction but it will not make a difference to thier return. (they would still get all thier money back regardless) The more money you make the more you need deductions to help offset your taxes.

the IRS assumes that if you are physically housing the child you are providing all of its financial needs. that is why the court must grant an NCP the right to claim the child. And the cp must sign the IRS form granting them this right.

if the cp is not working or works very little, they will get no use from the deduction, and if the NCP is paying thier support in full, it seems silly to deny the NCP a tax break, that in turn may benefit the child.

when both parents work, and contribute financially, not just physically they BOTH should be able to benefit from the tax break, by alternating years or if there are more than one child, they can each "take one".

Also the court uses the deduction sometimes as incentive to make the NCP stay current.

if the NCP gets the actual deduction,the parent designated the CP can still use the child for head of household, and the EIC, major taxbreaks that the NCP can never use.

 

[childrenRpeople]

Equitability

So if my ex and I are of equal earning power, it's seems more equitable to share this benefit. Yes?

 

[LdiJ]

What is the name of your state? CA

A general question...when parents have joint custodies but unequal parental time (for example, mom is with child 75% of time and dad is with child 25% of time), how should/do they usually determine who and how they split claiming the child for tax purposes?
Do parents in such a case usually alternate years even if the time-sharing is uneven?
Please let me know what parents usually do in such circumstances.
Thanks for the insight!-CRP

I am a tax accountant, so I may be able to give you info from a slightly different perspective than the others.

Per the IRS regs (which are controlling) the parent with primary physical custody is the parent who is entitled to the tax exemption. Technically, the state judges don't have the authority to make determinations regarding tax exemptions. However, historically the IRS tends to honor the state judge's court orders, despite that. The rules are beginning to change though...and the IRS is making noises that they may not continue to do that unless a form 8332 is filled out by the parent with primary physical custody.

There are a couple of things that can ONLY be taken by the parent with primary physical custody. That is Earned Income Credit (EIC) and the child care deduction. The only things that can be taken by an ncp are the actual tax deduction and the child tax credit. An ncp also cannot claim "head of household" unless there are other children in the ncp's home full time.

Whether or not a state judge will order that the exemption be shared every other year (and that is the norm unless the exemption remains permanently with the CP) depends a great deal on just how much child support is being paid, and whether or not that child support truly represents at least 50% of the child's support.

So, from the IRS's standpoint the fact that a cp has the child 75% of the time would automatically qualify the cp for the tax exemption. From the state judges point of view however, its going to be based more on the child support itself.

 

[haiku]

I am a tax accountant, so I may be able to give you info from a slightly different perspective than the others.

Per the IRS regs (which are controlling) the parent with primary physical custody is the parent who is entitled to the tax exemption. Technically, the state judges don't have the authority to make determinations regarding tax exemptions. However, historically the IRS tends to honor the state judge's court orders, despite that. The rules are beginning to change though...and the IRS is making noises that they may not continue to do that unless a form 8332 is filled out by the parent with primary physical custody.

There are a couple of things that can ONLY be taken by the parent with primary physical custody. That is Earned Income Credit (EIC) and the child care deduction. The only things that can be taken by an ncp are the actual tax deduction and the child tax credit. An ncp also cannot claim "head of household" unless there are other children in the ncp's home full time.

Whether or not a state judge will order that the exemption be shared every other year (and that is the norm unless the exemption remains permanently with the CP) depends a great deal on just how much child support is being paid, and whether or not that child support truly represents at least 50% of the child's support.

So, from the IRS's standpoint the fact that a cp has the child 75% of the time would automatically qualify the cp for the tax exemption. From the state judges point of view however, its going to be based more on the child support itself.

interesting story to illustrate these points. My husbands ex was court ordered to give my husband the deduction, but she refused and happily took the deduction he was court ordered to have for years. of course, to the IRS every thing was great, and they went along with her. And my husband let it go.

Finally some other stuff happened, my husband turned around and took her to court for contempt of the order. He had an accountant spell out exactly what he lost all those years and she was court ordered to pay him back, that amount. The judge made her sign form 8332 right there in the court room for all future years.

As i like to say, 'what the IRS giveth,the court can take away...." LOL

 

[TNBSMommy]

haiku, that is what you call "poetic justice"

 

[adonahee]

That's beautiful.....

But I have a friend who, along with her Ex, has joint custody. The parent who benefits with the highest deduction claims the child, but the monies are then deposited into an account for the child each year. Obviously BOTH parents will benefit, because they won't be fighting over college money down the road. I thought that was pretty ingenious, and fair.

 

[tigger22472]

But I have a friend who, along with her Ex, has joint custody. The parent who benefits with the highest deduction claims the child, but the monies are then deposited into an account for the child each year. Obviously BOTH parents will benefit, because they won't be fighting over college money down the road. I thought that was pretty ingenious, and fair.

The problem with that is figuring out who get the highest and getting together to do them together to figure it out. Dh had that too, now he just lets his ex claim it. His ex's husband had a point about it though, although it's a good idea it is also money THEY worked for all year and they are supporting the child anyways.

 

[adonahee]

Gosh, Tigger, funny you should show up!!

I was just talking about you !
So, what you're saying is that it's a good idea, or maybe it's a better one to use separate accounts for both households ?! ha ha

 

[Angel176]

What is the name of your state? CA

A general question...when parents have joint custodies but unequal parental time (for example, mom is with child 75% of time and dad is with child 25% of time), how should/do they usually determine who and how they split claiming the child for tax purposes?
Do parents in such a case usually alternate years even if the time-sharing is uneven?
Please let me know what parents usually do in such circumstances.
Thanks for the insight!-CRP

When you have your child 75% of the time you can file taxes on your child.They look at who has the child more and go off of that.I know i,ve been through that.

 

[lsharra]

i had a friend that their attoreny told them that if you can prove that you have spent the most money on the child that year can claim them. i am not giving advice it's just want i heard.

 

[tigger22472]

I was just talking about you !
So, what you're saying is that it's a good idea, or maybe it's a better one to use separate accounts for both households ?! ha ha

Yes and no. In the long run it is but there is also the stress of seeing who gets to claim (although we fixed that by having mom claiming sd) and making sure the money is actually going into that account. In the end it is a great idea but I have to admit that sd's step-dad had a point, they work for that money and they do support the child all year long.. but ya know.. it's not for me to judge. MHO is that it's best to have it done every other year unless of court CS isn't current.