Me and my wife are filing for divorce and expect the final divorce decree by September 2021. We just sold our home and have been living together all year (in our home and then in her new residence), but I will now be moving into my own residence. We have two adult children (18 and 21) who both attend school full-time. I provide financial support for both, including their school, automobiles, phones, health insurance, dental insurance, etc. However, given my job and time away, they both live with my wife (their mother) and I assist with her/their rent above and beyond the agreed upon spousal support. Three questions:
1. For the 2021 tax filing year, will I be able to file as Head of Household since we owned a home and lived together through June?
2. Will I be able to take deductions for the home interest and property taxes paid through June 2021?
2. If not, am I able to claim one or both adult children in 2021 or beyond since I provide financial support while they are still in college full-time?
3. If one of the children lives with me while in college will that be considered a qualifying condition for me to claim at least one as a dependent on my 2021 tax return?
Any assistance is greatly appreciated.
The key to answering your questions is determining which of you is the custodial parent since it is only that parent who can file as Head of Household if otherwise qualified. The custodial parent is the one with whom the child spent the most nights. In your case it appears that would be the mother for 2021. If one child lived with you in 2022 and the other with mom and you had separate households then each of you could file as Head of Household in 2022.
Note that the amount of financial support provided to the children is irrelevant.
Property tax and mortgage interest deduction is deducted by those who have the mortgage and own the property. In your case, if that is both of you, particularly if you are in a community property state, you would split the deductions.
- @Bsch4477 So we all lived together up until a week or so ago. Since her new place has more rooms than mine, the adult kids who both work full-time and attend school full-time opted to stay with her while they are in school. Sleeping in the home and having one single mailing address is essentially the extent of their presence in that residence, and she receives rent assistance for/from them both for staying there - basically like her having two adult roommates who happen to be our kids. They're even on the lease. So, I'm gathering from your response that none of this matters and that the fact they are in same residence means the IRS views her as the Custodial parent and that only she has ability to claim them both as dependents?? If so, wow, something really seems extremely wrong with this rule. We are totally ammicable, so curious if the IRS will somehow allow her to grant me the rights to claim them knowing what she and I both know?
By the way, another thing to mention is that both adult children do plan to live with me at different times throughout the year. Switching off various weeks and months.
Either adult child would have no issue staying with me from now through end of year and even in 2022. Her place is just bigger and I'm rarely home so they opted for that address.
Appreciate your advice!!
Yes. If they live more nights with her and if they do not provide more than half of their own support she gets to claim them. She can allow you to claim them as dependents by giving you a signed form 8332 in which case you can get the child tax credit. But she would still get EIC and be able to file as Head of Household. You would still have to file as single. But you could claim any education credit if otherwise qualified.
there is another thing that comes into play and that is the divorce decree. there is often a conflict between the divorce decree and the tax laws. the divorce decree may state that X gets to claim the children on their tax return even though they are not the custodial parent (NCP). the IRS says only the custodial parent can claim the children unless they furnish the NCP with form 8332 which must be submitted by the NCP with their 1040.
so make sure this is covered in the decree and if it's the NCP that gets to claim them make sure there's a provision for providing the 8332 or its replacement would the IRS come up with a new form and number.
if the tax laws are ignored the taxpayer faces additional taxes penalties and interest. if the court is ignored i suppose that taxpayer could find out what a cell looks like from the inside.
And the child tax credit is not a factor or concern since both kids are over the age of 18.
From 2018 thru 2025 there is no dependent exemption to waive however the Education credit is released to the non custodial parent via the 8332 so the custodial parent needs to take that into consideration ... if they cannot use it and the other parent can then that may be the better choice. Talking to each other is always wise.
One thing to keep in mind, and it's important.
If you are still married on December 31 of the tax year, and you file with a filing status of "Married Filing Separate", then neither of you qualify to take "any" education credits or deductions, regardless of who claims the dependents if they qualify to claim them.