Claiming Child on Taxes

[LdiJ]

And according to IRS rules, the custodial parent is the one who had the most overnights- NOT who is designated as custodial parent by the courts.

So, does this mean that all those years that we did every other year, because that is what the court order stated, I could have claimed her anyway because I met the IRS rules for claiming a dependent and IRS rules trump state law?

I wish I was grasping all of this quicker but I'm not.

I have remarried. My ex has remarried. He has small children, I do not. This year our daughter was with him more than half the year. About 220 days, give or take.

I understand about not claiming her for EIC, because of the residential time. It's the other that confuses me.

I am listed as custodial parent on paper. He has more time, though- and since I pay $40/month in child support, he's listed as the CP with the child support office.

I wish it was easier to explain, but unfortunately its not. Its complicated.

The IRS gives everything to the custodial parent based on the IRS's definition of custodial parent. However, the IRS also allows the custodial parent to sign form 8332 to give certain tax attributes to the non custodial parent...not all of them, but some of them. The ones that the custodial parent cannot give to the non custodial parent are EIC, Head of Household, and Daycare Credits. The IRS does not care what your court orders say. That is what is most important for you to understand. Your court orders mean squat to the IRS.

However, the state courts DO care what your court orders say, so the state court expects the custodial parent (by IRS's definition) to sign form 8332 giving the non custodial parent what attributes are available to the non custodial parent. (the dependency exemption, the child tax credit, the additional child tax credit and the education credits).

In your case, you are the non custodial parent by the IRS's definition. So, you can only claim the attributes I listed above. Your daughter is 17 so she is too old for the child tax credit and the additional child tax credit, and again because she is 17, its unlikely that she is in college so education credits do not apply either. That leaves only the dependency exemption. The dependency exemption could be worth either zero, or up to maybe about 1k based on you and your husband's combined income.

At the same time, claiming any tax attributes for your daughter might be worthless to dad as well depending on how many other children are in his household and his income level. He might get nothing more than the dependency exemption for her as well...and if that is the case, it could be worth anywhere between zero and about 1k.

So, the point I am making is that your daughter, at age 17, may not be significant in terms of taxes. Run the numbers both ways, with and without your daughter, based on you being the non custodial parent. I suggest that you do not attempt to do it yourself, because the odds are that you won't get it right with online software. Unless the results are significant enough that they really make a real difference to you, then let it go.

 

[AverageJoeMama]

I wish it was easier to explain, but unfortunately its not. Its complicated..

Thank you so much, LdiJ! You did an excellent job. It makes a lot more sense now!