Earned Income Credit

What is the name of your state? MN

I posted a question similar to this one a year ago or so, but I have another question.

My ex and I have joint physical custody, written as 65/35% in her favor. I actually have them 50%, and have for 10 years. My ex claimed the EIC and Working Family Credit for years, but has remarried, and doesn't qualify anymore because of income. She has suggested to me that I use these benefits since she can't, and would be willing to provide a written statement that I have the kids 50% +1 day if asked by the IRS. Because of business, and surguries she has had, I've actually had them more than 50% 7 out of the last 10 years.

I had an IRS problem (not related to this, and since cleared up) in 2005, and was audited then, and again for the 2006 tax year. I figure no "red flags" will pop up if I claim the EIC and WFC, as I would be the only party claiming these benefits, but I suspect I might be audited every year for awhile.

Can I claim these benefits? It is unclear from the IRS website. I can meet the residency test, but it also says that NCP's cannot claim the benefit, and I am the NCP.

The IRS defines the CP as the parent with whom the kids spend the greater amount of time (nights). The IRS matches claims of CP status against the state child support database, so your return might get flagged if the IRS gets info that you're the CP AND paying child support. That just means you need to be prepared to deal with an audit.

1. The best solution would be to go to court & have support/custody adjusted to reflect the reality that the kids are with you more than mom, due to her health. If you can get the court papers to say that this has been the case for some time, even better.

2. Make sure the kids are listed on your lease as secondary occupants.

3. Keep a journal/calendar showing that the kids slept at your house more than at mom's.

4. Make sure that school & medical records list the kids' primary residence as your place.

5. Definitely get the signed statement from mom that the kids have spend more time with you since her health troubles began. Among other things, it gives the IRS a good reason to believe that the court documents are outdated.

Don't forget to file head of household if you qualify. You might even investigate filing HH & claiming EIC, but executing a Form 8332 to allow the NCP (mom) to claim the kids. If mom & new hubby's income is high, they may get more benefit from the dependency exemptions & child tax credits.