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tax rights

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jms8616

Junior Member
What is the name of your state (only U.S. law)? illinois
if im paying child support and the other parent is not working who can file the child on their taxes.
 


Proserpina

Senior Member
What is the name of your state (only U.S. law)? illinois
if im paying child support and the other parent is not working who can file the child on their taxes.

How many overnights does each parent have?

(I would hope neither parent would actually file the child - that might be a bit painful! :) )
 

jms8616

Junior Member
its joint custody she has weekdays i have weekend she is the residential parent but has no income and is not married.
 

LdiJ

Senior Member
its joint custody she has weekdays i have weekend she is the residential parent but has no income and is not married.
She had no taxable income at all for the entire year? How is she living and supporting herself? How much child support do you pay? What does the custody decree state regarding tax exemptions?
 

mistoffolees

Senior Member
its joint custody she has weekdays i have weekend she is the residential parent but has no income and is not married.
Income doesn't matter in determining who gets the exemption (except as a tie-breaker).

Under IRS rules, the person with the most overnights gets the exemption with very few exceptions (see below). If the couples have the same number of overnights, then the one with the higher adjusted gross income gets the exemption. You can't change that and if you take an exemption you're not entitled to, you can be in big trouble.

There are a few minor exceptions. One of them is if the two of you together are providing less than 50% of the child's living expenses. Under some circumstances, the person providing >50% of the living expenses can claim the exemption if the child is living with them.

The biggest thing that may help you is the divorce decree. The divorce decree may say that you get the deduction either some of the time or all of the time. Note that the divorce decree can not legally award you the deduction. Rather, it can force the primary residential parent to sign an 8332 form which you submit with your taxes granting you the right to claim the deduction.

If there's nothing listed in your order giving you the deduction, you can simply ask the other person to sign an 8332 form giving you the deduction. If she has no income, it may not be of any value to her (although it could still be of some value with some of the child care credits) and might be more valuable to you. I would suggest that you estimate the taxes both ways an offer to pay her to sign an 8332 form granting you the deduction.
 

LdiJ

Senior Member
Income doesn't matter in determining who gets the exemption (except as a tie-breaker).

Under IRS rules, the person with the most overnights gets the exemption with very few exceptions (see below). If the couples have the same number of overnights, then the one with the higher adjusted gross income gets the exemption. You can't change that and if you take an exemption you're not entitled to, you can be in big trouble.

There are a few minor exceptions. One of them is if the two of you together are providing less than 50% of the child's living expenses. Under some circumstances, the person providing >50% of the living expenses can claim the exemption if the child is living with them.

The biggest thing that may help you is the divorce decree. The divorce decree may say that you get the deduction either some of the time or all of the time. Note that the divorce decree can not legally award you the deduction. Rather, it can force the primary residential parent to sign an 8332 form which you submit with your taxes granting you the right to claim the deduction.

If there's nothing listed in your order giving you the deduction, you can simply ask the other person to sign an 8332 form giving you the deduction. If she has no income, it may not be of any value to her (although it could still be of some value with some of the child care credits) and might be more valuable to you. I would suggest that you estimate the taxes both ways an offer to pay her to sign an 8332 form granting you the deduction.
There are no child tax attributes that are of any value to someone with no earned income at all.

My concern is that someone else may be providing the bulk of the children's support. That is why I asked the questions that I asked.
 

mistoffolees

Senior Member
There are no child tax attributes that are of any value to someone with no earned income at all.
I agree that it's not likely, but there ARE exceptions where someone with no earned income could benefit from the child care tax credit:
Ten Things to Know About the Child and Dependent Care Credit
You – and your spouse if you file jointly – must have earned income from wages, salaries, tips, other taxable employee compensation or net earnings from self-employment. One spouse may be considered as having earned income if they were a full-time student or were physically or mentally unable to care for themselves.
 

LdiJ

Senior Member
I agree that it's not likely, but there ARE exceptions where someone with no earned income could benefit from the child care tax credit:
Ten Things to Know About the Child and Dependent Care Credit
Misto, that applies to joint returns. It does not apply to head of household or single returns.

Normally, in order to claim a daycare credit on a joint return both parents must be working. The exception to that is what you noted.

There are no tax attributes for children that someone with zero income, could file to receive. The only possible credit that is partially refundable even with no income is one of the education credits,(American Opportunity) and that credit would probably end up on the child's return if the parent had no income at all.
 

mistoffolees

Senior Member
Misto, that applies to joint returns. It does not apply to head of household or single returns.
ROTFLMAO. I guess you missed the part where it says:
Your filing status must be single, married filing jointly, head of household or qualifying widow(er) with a dependent child.
Normally, in order to claim a daycare credit on a joint return both parents must be working. The exception to that is what you noted.

There are no tax attributes for children that someone with zero income, could file to receive. The only possible credit that is partially refundable even with no income is one of the education credits,(American Opportunity) and that credit would probably end up on the child's return if the parent had no income at all.
You are wrong. See the reference I provided. Read the entire thing and at least TRY to understand it.

I sure hope that the tax advice you give your clients is better than what you offer here.
 

LdiJ

Senior Member
ROTFLMAO. I guess you missed the part where it says:




You are wrong. See the reference I provided. Read the entire thing and at least TRY to understand it.

I sure hope that the tax advice you give your clients is better than what you offer here.
Let me try to explain this a different way or you are going to be having single parents who think that they can get daycare credits when they had no income...which is what you were claiming in the first place and what is completely wrong.

Daycare credits are not refundable credits. Therefore they can only be credited against actual tax due. If you have no income, you have no tax due and therefore nothing to take the credits against.

Therefore, unless its a joint tax return and one of the parties has income, a parent with no income is going to have no benefit from any daycare credit.

Now a single parent who works part time and goes to school part time (for example) can benefit from daycare credits for daycare expenses paid for both working hours and school hours. However again, they gotta have income to benefit...and enough income that it wouldn't already be wiped out by their standard deduction and personal exemptions.

A single disabled parent is unlikely to be able to use any daycare credits unless they also had taxable income. Since most forms of disability income are not taxable, most disabled single parents would not be able to use any daycare credits.

This is really basic stuff Misto...All you have to do is look at a 1040 and it is glaringly obvious.

So, once again, there are no tax attributes for children that benefit a parent with no income. All refundable credits for children require a parent to have income, and not just income but earned income.
 

mistoffolees

Senior Member
Let me try to explain this a different way or you are going to be having single parents who think that they can get daycare credits when they had no income...which is what you were claiming in the first place and what is completely wrong.

Daycare credits are not refundable credits. Therefore they can only be credited against actual tax due. If you have no income, you have no tax due and therefore nothing to take the credits against.

Therefore, unless its a joint tax return and one of the parties has income, a parent with no income is going to have no benefit from any daycare credit.

Now a single parent who works part time and goes to school part time (for example) can benefit from daycare credits for daycare expenses paid for both working hours and school hours. However again, they gotta have income to benefit...and enough income that it wouldn't already be wiped out by their standard deduction and personal exemptions.

A single disabled parent is unlikely to be able to use any daycare credits unless they also had taxable income. Since most forms of disability income are not taxable, most disabled single parents would not be able to use any daycare credits.

This is really basic stuff Misto...All you have to do is look at a 1040 and it is glaringly obvious.

So, once again, there are no tax attributes for children that benefit a parent with no income. All refundable credits for children require a parent to have income, and not just income but earned income.
Or if they have unearned income, the tax credits can be applied against that.

In the end, the fact is that you were wrong. You claimed that a person without earned income could not benefit from the deduction for a child. I showed at least one example where they could. I'm sure there are more, but I'm not going to bother searching since just this one was enough to disprove your assertion that a person without income could not benefit.
 

LdiJ

Senior Member
Or if they have unearned income, the tax credits can be applied against that.

In the end, the fact is that you were wrong. You claimed that a person without earned income could not benefit from the deduction for a child. I showed at least one example where they could. I'm sure there are more, but I'm not going to bother searching since just this one was enough to disprove your assertion that a person without income could not benefit.
Ok...lets use your unearned income (but must be taxable unearned income) example....

Mom has 1 million of investments and is lucky enough to get a 2% return (about double what is really possible these days). That gives her 20k of unearned income.

Her standard deduction as head of household is 8500.00. There are 2 children so she has total exemptions of $11,100 for a total of 19600.00. That would give her taxable income of 400.00, putting her in the 10% tax bracket. That means she owes $40.00 in tax IF the income is not from capital gains.

So, she could benefit a whopping $40.00 using ANY non-refundable tax credit, NOT just the daycare credit. She would not receive any refundable credits, because she had no earned income.

Now, lets take that same 1 million of investments and do what any reasonable person would do and put a decent chunk of it in tax free munnies, some in liquid investments and some in stocks and other bonds. Lets say that she does really great and has $50k in return for the year, with 20k of it being capital gains, and 15k being tax free munnies.

She has the same total of 19600.00 in standard deduction/personal exemptions. Leaving $15400.00 in income because the 15k from the tax free munnies is not taxalbe. Since her capital gains are greater than the $15400.00 in income after deductions, and she clearly would not fall in any tax bracket above 15%, her actual tax is ZERO...because capital gains for anyone in the 10% or 15% tax bracket for 2011 and 2012 is ZERO%

Any of course, the parent in question must be either disabled or going to school in order to qualify for the daycare credit.

So yeah...if you want to claim that I was wrong because I did not include the extraordinarily unlikely scenario that the parent in question would have enough investment income to actually owe tax, let alone have any viable benefit from claiming a daycare credit...go right ahead and beat your chest.
 

mistoffolees

Senior Member
Ok...lets use your unearned income (but must be taxable unearned income) example....

Mom has 1 million of investments and is lucky enough to get a 2% return (about double what is really possible these days). That gives her 20k of unearned income.

Her standard deduction as head of household is 8500.00. There are 2 children so she has total exemptions of $11,100 for a total of 19600.00. That would give her taxable income of 400.00, putting her in the 10% tax bracket. That means she owes $40.00 in tax IF the income is not from capital gains.

So, she could benefit a whopping $40.00 using ANY non-refundable tax credit, NOT just the daycare credit. She would not receive any refundable credits, because she had no earned income.

Now, lets take that same 1 million of investments and do what any reasonable person would do and put a decent chunk of it in tax free munnies, some in liquid investments and some in stocks and other bonds. Lets say that she does really great and has $50k in return for the year, with 20k of it being capital gains, and 15k being tax free munnies.

She has the same total of 19600.00 in standard deduction/personal exemptions. Leaving $15400.00 in income because the 15k from the tax free munnies is not taxalbe. Since her capital gains are greater than the $15400.00 in income after deductions, and she clearly would not fall in any tax bracket above 15%, her actual tax is ZERO...because capital gains for anyone in the 10% or 15% tax bracket for 2011 and 2012 is ZERO%

Any of course, the parent in question must be either disabled or going to school in order to qualify for the daycare credit.

So yeah...if you want to claim that I was wrong because I did not include the extraordinarily unlikely scenario that the parent in question would have enough investment income to actually owe tax, let alone have any viable benefit from claiming a daycare credit...go right ahead and beat your chest.
Look, it's simple. You keep making incorrect statements. After the error is pointed out, instead of admitting that you made a mistake, you continue to dig your hole deeper (by claiming, for example, that the child care credit rules only apply if married, filing jointly). After THAT error is corrected, you try to make up scenarios to back your position.

The facts are really simple. You claimed that it's impossible to benefit from a child deduction if you don't have income.

You were wrong - as I showed.

Stop making incorrect blanket statements and I won't have to continue spending my time correcting you. Simple.
 

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