@austinleeknobs wrote:
Mother is custodial parent but we have 50-50 arrangement. Twice a week and e/o weekend. I pay child support and medical and judge ordered e/o year I can claim daughter. This is the year. I got refund already
The IRS determines custody by where the child lives more than half the nights of the year. It does not follow state court orders and there is no such thing as 50/50 custody in a year with an odd number of nights. One parent must have the child more nights than the other.
The parent where the child sleeps more than half the nights of the year is the only parent who can claim EIC. That and the dependent care credit can never be waived or transferred, even though the dependent credit can be transferred.
If the custodial parent is supposed to transfer the dependent to you this year, they must give you a signed form 8332 dependent release. In Turbotax you indicate the child lived with you less than half the year, by choosing 6 months or less in the interview, and that you will receive a form 8332 to claim the child. Turbotax will assign you the dependent credit but not EIC, and you will be required to mail the signed original form 8332 to the IRS along with a cover page after e-filing the rest of the return.
If you answered the child lived with you more than half the year, then Turbotax will give you EIC and the dependent credit without form 8332, but this is incorrect. When the other parent files their return, they will say the child lived with them more than half the year and they gave you form 8332. The other parent will get EIC but will have to file by mail. In about 9-12 months the IRS will investigate both parents, and if you have custody less than half the year and dont have form 8332, you will have to repay the EIC, the dependent credit, and interest and penalties. If you do have form 8332, you will still have to pay back the EIC with interest and late fees.
You need to file an amended return to change your answers on the residency test to less than half the year, and "yes I have form 8332 from the other parent." (The other parent must give you this form if the court ordered it.) You will have to repay the EIC but you will still get the dependent credit. If you file the amended return before April 15, there won't be any interest or late fees on the repayment. Keep copies of everything you file and use a mailing service with tracking and delivery confirmation for your amended return. If your state has state EIC, you may need to file an amended state return too.
