@peachette19 wrote:
Maybe. As a trained lawyer (also in the student loan MFS boat) I’d like to think I’m half okay at interpreting rules and my interpretation is that you can claim the DCA income exclusion for a qualifying child, which CAN be a dependent but not MUST be a dependent. I am further confused because I paper filed with this explanation for 2019 and the IRS agreed with me. Otherwise doing $2,500 each spouse makes no sense, if only one spouse can exclude it from income on the back end.
If you file MFS, the maximum exclusion is $2500. See here,
https://www.law.cornell.edu/uscode/text/26/129
This concept is incorporated on lines 19-21 of form 2441 and their instructions.
If you do not meet the special conditions, a person filing MFS is only eligible for a $2500 exclusion, and only if they actually claim the child, and they are not eligible for the credit.
Just because the IRS paid your refund last year, doesn't mean they accepted your claim. They have 3 years to audit you. If you attached a statement confirming that you and your spouse lived apart for all of the last 6 months of the year, then you are fine, but you also would have qualified for HOH and probably cost yourself a few thousand dollars by filing MFS instead.
