Earned Income Credit

[Astrolink]

What is the name of your state? Minnesota

I've divorced. My ex and have shared legal and physical custody, but she is the primary parent in the decree. We split the time 50/50 if you go by hours, or, I have 46% of the time if you go by overnights. My ex has remarried to a very high wage earner, and will not apply for the EIC or WFC (working family credit in MN). Is it possible for me to legally get these credits? I qualify from a financial standpoint, and if you go by hours, my ex had surgery earlier this year, and I had them a couple extra weeks, thus I had them over 50%. If you go by overnights, I'm still about 5 short of 50%. I also pay CS, and am certainly paying for more than 50% of their care. The only question I could find at the IRS website to determine eligibility, was how many months the children lived with me out of the year, and the answer is 12. The children live in both homes every month. My question: is there any case where the NCP can get the EIC, or is it reserved for CP's only? Any assistance is appreciated.

[LdiJ]

Originally Posted by Astrolink

What is the name of your state? Minnesota

I've divorced. My ex and have shared legal and physical custody, but she is the primary parent in the decree. We split the time 50/50 if you go by hours, or, I have 46% of the time if you go by overnights. My ex has remarried to a very high wage earner, and will not apply for the EIC or WFC (working family credit in MN). Is it possible for me to legally get these credits? I qualify from a financial standpoint, and if you go by hours, my ex had surgery earlier this year, and I had them a couple extra weeks, thus I had them over 50%. If you go by overnights, I'm still about 5 short of 50%. I also pay CS, and am certainly paying for more than 50% of their care. The only question I could find at the IRS website to determine eligibility, was how many months the children lived with me out of the year, and the answer is 12. The children live in both homes every month. My question: is there any case where the NCP can get the EIC, or is it reserved for CP's only? Any assistance is appreciated.

It goes by the actual amount of overnights that the children spent in your home....assuming that you can prove that. The children must have spent more than 50% of their overnights in your home.

In a 50/50 situation children do not live 12 months in each home...they live 1/2 of 12 months (or 6 months) in each home.

[abezon]

Next year, have the kids spend more overnights with you, so that you are the CP. Your wife would probably agree to this if you give her a Form 8332 ahead of time allowing her to claim the kids as the non-custodial parent every year.

[Astrolink]

In my state, you have to have the kids 60% of the time to ask for a change of custody, and there is specific law that time spend with the NCP in lieu of CP's daycare counts as the CP's time, so I will remain the NCP. Beyond that, I'll have to take a look at the exact number of overnights to see if I've reached 50% + 1. Thanks for the advice.

[abezon]

State law is irrelevant. What the decree says about who is the CP is irrelevant. At tax time, the ONLY thing that matters is whether the kids' "principal place of abode" for over 1/2 the year was you or their other parent. It is very common to have 1 parent designated as the CP in the paperwork & the other parent be the CP under tax law. Thus, if the kids spend more nights with you, you are the CP as far as the IRS is concerned (probably the state too).

My point was that your ex would probably not object to you guys setting things up so that you are the CP under tax laws, as long as s/he still gets to claim the kids as dependents & you reimburse him/her for the lost day care credit. If you get the kids over 1/2 the nights, you get to file as head of household, claim EIC, & the day care credit. This could easily be a $6,000 swing. You give your ex a signed 8832 (now) letting him/her claim the kids as dependents & get the child tax credits in the future. You reimburse him/her for the lost day care credit. You put 1/2 the extra money into the kids' 529 college fund & everyone is happy. Ex gets the same refund, you get more $$, & the US government pays to send them to college. BUT, you have to have the proof if you're audited, which means making sure the kids' school & medical records list them as living with you, listing them as extra tenants on your lease, & that you & your ex both keep calendars showing where the kids slept each night (& the calendars agree!).

BTW, if the kids are close to college age, it might be better for financial aid purposes if you are the CP.

Now go forth & manufacture money out of thin air.

[Astrolink]

I've got everything covered except the school and medical records. Both of us are listed for school, and we both get copies of everything. My ex however, carries the medical insurance on the kids, and any medical bills or invoices have my ex's address. Daycare isn't an issue, the kids are in their teens, so there isn't any. Thanks for your help.

[LdiJ]

Originally Posted by Astrolink

I've got everything covered except the school and medical records. Both of us are listed for school, and we both get copies of everything. My ex however, carries the medical insurance on the kids, and any medical bills or invoices have my ex's address. Daycare isn't an issue, the kids are in their teens, so there isn't any. Thanks for your help.

Proving it is definitely where it get sticky for you. There is a court order that states that you are the ncp.

One good type of documentation is to keep a calendar of who has the kids, and when.