As per custody agreement, my child's dad claims her in 2020. I pay all college tuition. Do I enter 1098-T on my taxes? Child makes about $300/month. Does she file taxes?

[ColeenD3]

The child's father claims the credit in 2020.  To claim the credit a parent must claim the student as a dependent on their tax return.

If your daughter was paid by Form W-2, she is under the filing requirement and does not need to file. If she had withholding, the only way to get it refunded is to file a return.

If she was not an employee and earned money, she is required to file if that amount is $400 or more.

[aksi0]

Thank you for your quick response! Her father has not contributed to tuition or any other of her expenses for over a decade. She lived with me full time until fall 2020 when she went to college. Her dad still insists on claiming her as his dependent on his taxes every even year and will not let me claim our daughter as my dependent during 2020, which is his based on agreement. Does that mean I cannot claim this expense on my taxes at all?

[Hal_Al]

Q. Does that mean I cannot claim the education expense on my taxes at all?

A.  Yes.  In order to claim the tuition credit, or deduction, you must be claiming the child as a dependent.

But, the tuition credit is not lost.  The father may claim it, even though you paid the tuition.   The credit/deduction goes with the student's dependency, regardless of who paid.

[ColeenD3]

You are the custodial parent. In order for the non-custodial parent to claim the dependent, you need to release the claim on Form 8332. A divorce decree does not override IRS ruling. See this LINK for more information.

If you both claim your child, you will get an IRS letter clarifying who has the right to claim. They will make the determination based on facts and proof of residency. Whoever loses, pays back the credit to the IRS.

Custodial parent and noncustodial parent.   The custodial parent is the parent with whom the child lived for the greater number of nights during the year. The other parent is the noncustodial parent.

If the parents divorced or separated during the year and the child lived with both parents before the separation, the custodial parent is the one with whom the child lived for the greater number of nights during the rest of the year.

[Hal_Al]

@aksi0 

 New issue: Q. Can the dad still claim the child as a dependent?  

A. Probably not. 

There is a special rule for divorced and separated parents (including never married) that allows the non custodial parent to claim the child (by agreement or court order and with form 8332) even though he technically doesn't meet the dependent rules.  That special rule ends when the child reaches emancipation age (18, but effectively 18-1/2,  in almost all states*).

So you may have an agreement, between you,  that says he can claim her for 2020 (even year).  But that agreement is not binding on the IRS.  If you both try to claim the kid, the IRS will rule for you.

*Age 18 in 47 states (19 in AL & NE, 21 in MS). Must be over 18 for more than half the year, for the special rule to no longer apply.