Vague divorce agreement regarding dependent

[HRZ]

Mom / OP dust off your last 3 tax returns and if you were entitled to claim your child for any prior year under the IRC and did not and no 8332 was issued ...file amended returns ...you must file the oldest within 3 years of the original filing and you may want to cross check dates of turning 18 and who provided what as per order .

 

[Zigner]

Yes, but in this instance the person is still a "qualifying child" for tax purposes, not a qualifying relative...and the IRS goes by their rules which says that the exemption automatically goes to the custodial parent (as the IRS defines custodial parent) unless the custodial parents give a signed form 8332 to the non-custodial parent. So, for tax purposes a student can have a custodial parent clear up until they turn 24.

A brother or sister cannot necessarily claim their sibling as a "qualifying child" unless certain conditions are met, so its not quite the same thing.

The same conditions must be met by the parent of the qualifying child as for a sibling of the qualifying child. Again, I believe we're talking semantics here. I agree with your concept, just not your phrasing.

Can you tell me where you are getting the definition of a "custodial parent" from? Perhaps that will help me to either (a) understand your position better, or (b) better explain my position.

 

[LdiJ]

Mom / OP dust off your last 3 tax returns and if you were entitled to claim your child for any prior year under the IRC and did not and no 8332 was issued ...file amended returns ...you must file the oldest within 3 years of the original filing and you may want to cross check dates of turning 18 and who provided what as per order .

That is dangerous advice. While its absolutely true for IRS purposes and the IRS would find in the OP's favor, the OP would be in violation of the divorce agreement and the state could judge would slam her for doing that.

 

[Ohiogal]

That is dangerous advice. While its absolutely true for IRS purposes and the IRS would find in the OP's favor, the OP would be in violation of the divorce agreement and the state could judge would slam her for doing that.

Oh and the child being referred to is 21. So not necessarily.

 

[HRZ]

OP. I thought I covered it ...but for the child who turned 18 and was to be claimed by dad per the order, go back and double check dates and sequences ..the duty to pay child support most likely ended at the later of turning 18 or graduation from high school, d that's within the 3 year lookback to file amended return .

BTW Dad is on wrong page as to IRS absent a 8332 no matter what the order says ( unless order recites certain language require by IRC) ...as at least n my lay view you need only double check that you don't clam child for a year in which the PA order says otherwise ...

 

[LdiJ]

The same conditions must be met by the parent of the qualifying child as for a sibling of the qualifying child. Again, I believe we're talking semantics here. I agree with your concept, just not your phrasing.

Can you tell me where you are getting the definition of a "custodial parent" from? Perhaps that will help me to either (a) understand your position better, or (b) better explain my position.

Zig, I cannot find it quickly in the IRS pubs. I can find the definition of custodial parent in multiple different tax professional blogs and in TurboTax but I just do not have the time to search any further in the pubs. I haven't had to look that up in at least 20 years. I am pretty certain its in Publication 17 but that pub is almost 300 pages. However, if you read through the instructions for form 8332. And you read through the Qualifying Child Rules, and you read through the Tie Breaker rules I think that will help you understand what is being discussed.

As long as the person in question is treated as a qualifying child, of a parent, for tax purposes there has to be a custodial parent for tax purposes. Certain tax attributes belong only to the custodial parent. The biggest one is that the parent would still qualify for EIC for a qualifying child, but would NOT qualify for EIC for an adult unless that adult was still in school (up to age 24) or disabled.

 

[Ohiogal]

Zig, I cannot find it quickly in the IRS pubs. I can find the definition of custodial parent in multiple different tax professional blogs and in TurboTax but I just do not have the time to search any further in the pubs. I haven't had to look that up in at least 20 years. I am pretty certain its in Publication 17 but that pub is almost 300 pages. However, if you read through the instructions for form 8332. And you read through the Qualifying Child Rules, and you read through the Tie Breaker rules I think that will help you understand what is being discussed.

As long as the person in question is treated as a qualifying child, of a parent, for tax purposes there has to be a custodial parent for tax purposes. Certain tax attributes belong only to the custodial parent. The biggest one is that the parent would still qualify for EIC for a qualifying child, but would NOT qualify for EIC for an adult unless that adult was still in school (up to age 24) or disabled.

Hey Tax professional -- I found this in 30 seconds. https://www.irs.gov/pub/irs-pdf/p501.pdf
Look at page 9 and 10.

Then page 12:

! This table is only an overview of the rules. For details, see the rest of this publication. You can't claim any dependents if you, or your spouse if filing jointly, could be claimed as a dependent by another taxpayer. You can't claim a married person who files a joint return as a dependent unless that joint return is filed only to claim a refund of withheld income tax or estimated tax paid. You can't claim a person as a dependent unless that person is a U.S. citizen, U.S. resident alien, U.S. national, or a resident of Canada or Mexico.1 You can't claim a person as a dependent unless that person is your qualifying child or qualifying relative. Tests To Be a Qualifying Child Tests To Be a Qualifying Relative 1. The child must be your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them. 2. The child must be (a) under age 19 at the end of the year and younger than you (or your spouse if filing jointly), (b) under age 24 at the end of the year, a student, and younger than you (or your spouse if filing jointly), or (c) any age if permanently and totally disabled. 3. The child must have lived with you for more than half of the year.2 4. The child must not have provided more than half of his or her own support for the year. 5. The child must not be filing a joint return for the year (unless that joint return is filed only to claim a refund of withheld income tax or estimated tax paid). If the child meets the rules to be a qualifying child of more than one person, only one person can actually treat the child as a qualifying child. See Qualifying Child of More Than One Person, later, to find out which person is the person entitled to claim the child as a qualifying child. 1. The person can't be your qualifying child or the qualifying child of any other taxpayer. 2. The person either (a) must be related to you in one of the ways listed under Relatives who don't have to live with you, or (b) must live with you all year as a member of your household2 (and your relationship must not violate local law). 3. The person's gross income for the year must be less than $4,050.3 4. You must provide more than half of the person's total support for the year.4 1 There is an exception for certain adopted children. 2 There are exceptions for temporary absences, children who were born or died during the year, children of divorced or separated parents (or parents who live apart), and kidnapped children. 3 There is an exception if the person is disabled and has income from a sheltered workshop. 4 There are exceptions for multiple support agreements, children of divorced or separated parents (or parents who live apart), and kidnapped children.

Try qualifying child. It doesn't mention CUSTODIAL PARENT.

Page 13 then says:

Qualifying Child Five tests must be met for a child to be your qualifying child. The five tests are: 1. Relationship, 2. Age, 3. Residency, 4. Support, and 5. Joint return.

And it explains the tests.

Page 14 talks about custodial parent and non custodial parent but it is in regards to "qualifying child" ...


What are the qualifications of a "tax professional"? Is there a license? Special education that is required? A degree?

 

[Zigner]

Further to that, a "qualifying child" doesn't necessarily have to be the "child" of the person claiming the person.

ETA: Where I posted "Further to that" above, it wasn't the right phrase. I should have said "To reiterate"

 

[Ohiogal]

Further to that, a "qualifying child" doesn't necessarily have to be the "child" of the person claiming the person.

ETA: Where I posted "Further to that" above, it wasn't the right phrase. I should have said "To reiterate"

Let's just make up phrases.

 

[Taxing Matters]

The IRS's definition of custodial parent is the parent with whom the child primarily lives...and college is considered to be a temporary absence from the custodial parent's home, up until age 24.

That’s literally true as written, but there is more to it than that, one that I think even a lot of tax preparers overlook. The definition of custodial parent only matters to determine when the rule for divorced and separated parents in IRC § 152(e) applies. The tax regulations provide the definitions of custody, custodial parent, and noncustodial parent as follows:

(c) Custody. A child is in the custody of one or both parents for more than one-half of the calendar year if one or both parents have the right under state law to physical custody of the child for more than one-half of the calendar year.

(d) Custodial parent—(1) In general. The custodial parent is the parent with whom the child resides for the greater number of nights during the calendar year, and the noncustodial parent is the parent who is not the custodial parent. A child is treated as residing with neither parent if the child is emancipated under state law.
​

Treas. Reg. § 1.152-4(c) and (d). (Underlining added). Note that in subsection (c) the regulation defines custody as having the right under state law to physical custody of the child. Under state law, however, the parents lose the right to physical custody of their children once they reach the age of majority. The kid at that point has the legal right to determine where he lives and is no longer under the physical control of his parents. The first sentence of subsection (d) does indeed state the rule you did. But then the second sentence, which I underlined, emphasizes what the definition of custody makes clear: that once the kid is emancipated no parent is considered to be the custodial parent and thus for the purposes of the divorced and separated parent rule the child is treated as not having lived with either one of them. (I left out the remaining part of subsection (d) that discusses how to determine the nights spent with each parent as that is not relevant to this discussion.)

So what does that mean for determining who may claim the child (if anyone) as a dependent once the child is an adult, i.e. age 18 or older in Pennsylvania? If the kid was an adult for the entire year it means that you have to look at the qualifying child test and qualifying relative test without the benefit of the rule for divorced and separated parents.

For the qualifying child test, this means that the adult child must be both under age 24 and a full-time student and that the adult child must reside with the parent claiming him for the entire year. Just living with the parent for over half the year is not good enough. And, of course, the child must not have provided over half his own support.

If no one is eligible to claim the child under the qualifying child test then we have to look to the qualifying relative test. Under the qualifying relative test it does not matter with which parent the child lived or how old the child is, or whether the child is a student. But only the parent who provided over one-half the child’s total support may claim the child. And if the child had more than $4,050 in gross income (for 2017) no one may claim him under the qualifying relative test.

Finally, how does the rule for divorced and separated parents fit in when the child became emancipated (turned 18) during that tax year? IRS Publication 501, page 14, explains that by way of two examples:

Example 5—child emancipated in May.
When your son turned age 18 in May 2017, he became emancipated under the law of the state where he lives. As a result, he isn't considered in the custody of his parents for more than half of the year. The special rule for children of divorced or separated parents doesn't apply.

Example 6—child emancipated in August.
Your daughter lives with you from January 1, 2017, until May 31, 2017, and lives with her other parent, your ex-spouse, from June 1, 2017, through the end of the year. She turns 18 and is emancipated under state law on August 1, 2017. Because she is treated as not living with either parent beginning on August 1, she is treated as living with you the greater number of nights in 2017. You are the custodial parent.
​

Publication 17 for 2017 is available on the IRS web site here: https://www.irs.gov/pub/irs-pdf/p501.pdf

 

[LdiJ]

That’s literally true as written, but there is more to it than that, one that I think even a lot of tax preparers overlook. The definition of custodial parent only matters to determine when the rule for divorced and separated parents in IRC § 152(e) applies. The tax regulations provide the definitions of custody, custodial parent, and noncustodial parent as follows:

(c) Custody. A child is in the custody of one or both parents for more than one-half of the calendar year if one or both parents have the right under state law to physical custody of the child for more than one-half of the calendar year.

(d) Custodial parent—(1) In general. The custodial parent is the parent with whom the child resides for the greater number of nights during the calendar year, and the noncustodial parent is the parent who is not the custodial parent. A child is treated as residing with neither parent if the child is emancipated under state law.
​

Treas. Reg. § 1.152-4(c) and (d). (Underlining added). Note that in subsection (c) the regulation defines custody as having the right under state law to physical custody of the child. Under state law, however, the parents lose the right to physical custody of their children once they reach the age of majority. The kid at that point has the legal right to determine where he lives and is no longer under the physical control of his parents. The first sentence of subsection (d) does indeed state the rule you did. But then the second sentence, which I underlined, emphasizes what the definition of custody makes clear: that once the kid is emancipated no parent is considered to be the custodial parent and thus for the purposes of the divorced and separated parent rule the child is treated as not having lived with either one of them. (I left out the remaining part of subsection (d) that discusses how to determine the nights spent with each parent as that is not relevant to this discussion.)

So what does that mean for determining who may claim the child (if anyone) as a dependent once the child is an adult, i.e. age 18 or older in Pennsylvania? If the kid was an adult for the entire year it means that you have to look at the qualifying child test and qualifying relative test without the benefit of the rule for divorced and separated parents.

For the qualifying child test, this means that the adult child must be both under age 24 and a full-time student and that the adult child must reside with the parent claiming him for the entire year. Just living with the parent for over half the year is not good enough. And, of course, the child must not have provided over half his own support.

If no one is eligible to claim the child under the qualifying child test then we have to look to the qualifying relative test. Under the qualifying relative test it does not matter with which parent the child lived or how old the child is, or whether the child is a student. But only the parent who provided over one-half the child’s total support may claim the child. And if the child had more than $4,050 in gross income (for 2017) no one may claim him under the qualifying relative test.

Finally, how does the rule for divorced and separated parents fit in when the child became emancipated (turned 18) during that tax year? IRS Publication 501, page 14, explains that by way of two examples:

Example 5—child emancipated in May.
When your son turned age 18 in May 2017, he became emancipated under the law of the state where he lives. As a result, he isn't considered in the custody of his parents for more than half of the year. The special rule for children of divorced or separated parents doesn't apply.

Example 6—child emancipated in August.
Your daughter lives with you from January 1, 2017, until May 31, 2017, and lives with her other parent, your ex-spouse, from June 1, 2017, through the end of the year. She turns 18 and is emancipated under state law on August 1, 2017. Because she is treated as not living with either parent beginning on August 1, she is treated as living with you the greater number of nights in 2017. You are the custodial parent.
​

Publication 17 for 2017 is available on the IRS web site here: https://www.irs.gov/pub/irs-pdf/p501.pdf

I will not disagree with any of this but I will also add...

Being away at school counts as a temporary absence from the home and therefore counts as the child living all year long with the parent.

 

[Taxing Matters]

I will not disagree with any of this but I will also add...

Being away at school counts as a temporary absence from the home and therefore counts as the child living all year long with the parent.

If the child’s permanent home is with the parent and the child is simply temporarily living at school while school is in session (e.g. in a dorm room) I agree with that. Where the child resides is a question that must be answered after looking at all the facts and circumstances. So yes, the OP might still get to claim the child as a dependent for 2017 if the child did reside with the OP for the whole year, other than the temporary absences for school, vacations, etc.

I think I should point out two things here for the OP that have not been clearly addressed yet. First, don't worry so much about what the father claims on his return. The worst that will happen is that if he files first and claims the exemption you will have to file on paper. The IRS will initially accept both returns and later on when both returns get matched the IRS will send out letters to start the process of figuring out who is really entitled to it. So focus on whether you qualify to claim the exemption. If you do, go ahead and take it and just be prepared to show you were entitled to it when the IRS asks. As long as you can defend your return, you’ll be fine. You don’t need to worry about what might happen to the other parent for getting it wrong.

Second, starting for tax years 2018 through 2025 this issue won't matter any more as the new tax bill enacted last month does away with the dependent exemptions for those years.

 

[LdiJ]

If the child’s permanent home is with the parent and the child is simply temporarily living at school while school is in session (e.g. in a dorm room) I agree with that. Where the child resides is a question that must be answered after looking at all the facts and circumstances. So yes, the OP might still get to claim the child as a dependent for 2017 if the child did reside with the OP for the whole year, other than the temporary absences for school, vacations, etc.

I think I should point out two things here for the OP that have not been clearly addressed yet. First, don't worry so much about what the father claims on his return. The worst that will happen is that if he files first and claims the exemption you will have to file on paper. The IRS will initially accept both returns and later on when both returns get matched the IRS will send out letters to start the process of figuring out who is really entitled to it. So focus on whether you qualify to claim the exemption. If you do, go ahead and take it and just be prepared to show you were entitled to it when the IRS asks. As long as you can defend your return, you’ll be fine. You don’t need to worry about what might happen to the other parent for getting it wrong.

Second, starting for tax years 2018 through 2025 this issue won't matter any more as the new tax bill enacted last month does away with the dependent exemptions for those years.

You are forgetting about education credits. If someone is not their parent's dependent (whether the exemptions go away or not) then the parent cannot claim the education credit, and people under 24 cannot claim the American Opportunity Credit unless they have no living parent, are married, have children of their own, etc. In addition, there is a $500.00 credit for each adult dependent.

 

[Ohiogal]

I note LD that you refuse to ADDRESS ANYTHING I have asked you or stated.

 

[HRZ]

Mom/OP ...bottom line it makes sense to check your facts for the past 3 years and file any appropriate amended returns in time. ( Not hard to do ) This does not require any agrement from or notice to Dad.


IF you think there are doubts about your meeting the 50% support test fo child repost with numbers and perhap there are some suggestions to check.