Filing a 1040X to REMOVE Child Tax Credit.

[nonohmic]

New Mexico

All, my wife has an agreement with her ex-husband that they claim the child tax credit on alternate years. And we have done so for 2015 and 2017.

Now the ex-husband is asking that we file 1040X forms to reneg our claim for those years so that he may file retroactive tax returns - I guess his situation means that he will stand to gain a better refund. I am willing to help out for the sake of civility, also he will compensate us for time etc.

All I find on google is people have forgot to claim, hence the reason for a 1040X. Are there any implications in removing a child in a 1040X? What are some issues we may face?

Thanks!

 

[Taxing Matters]

In order for him to claim the child tax credit (CTC) he must also be able to claim the child as his dependent on his U.S. federal income tax return. If he is not the custodial parent, then that means your wife must execute a waiver in which she agrees not to claim the child as her dependent on the return and allows her ex to claim the child on his returns instead. Form 8332 can be used for the waiver. This means you lose not only the CTC but the dependent exemption as well, and perhaps lose other tax benefits, too. Be careful what you agree to, this may cost you more than you think. Bear in mind that what you owe by doing this will include interest.

 

[LdiJ]

New Mexico

All, my wife has an agreement with her ex-husband that they claim the child tax credit on alternate years. And we have done so for 2015 and 2017.

Now the ex-husband is asking that we file 1040X forms to reneg our claim for those years so that he may file retroactive tax returns - I guess his situation means that he will stand to gain a better refund. I am willing to help out for the sake of civility, also he will compensate us for time etc.

All I find on google is people have forgot to claim, hence the reason for a 1040X. Are there any implications in removing a child in a 1040X? What are some issues we may face?

Thanks!

You could go to a local tax professional and have them run the numbers so you can see exactly what it will mean to you to remove the child from your tax return. Then you can decide whether or not to agree to amend your return.