I gave my ex-wife 1/3 of child tax credit payment, as I am letting her claim one child. Should I enter 2/3 of the advance child tax credit payment I received?

[dgrover1962]

I received $750 each month, and wrote a check to my wife for $250.  Divorce order lets me claim the kids, but I am allowing her to claim one.

[xmasbaby0]

You are getting a letter from the IRS that will show the advance CTC payments that were sent to YOU.   You have to enter that amount.   That is the amount the IRS will look for when you file your 2021 return.   If you enter an amount that does not match your letter you will end up being reviewed and your refund will be delayed.

Whatever you did with the checks sent to you and how you shared the money is between you and your ex-wife.   You are eligible for the other half of the CTC if YOU are claiming the children on your 2021 return.

Not sure how the two of you have your finances arranged---as to "allowing" the ex to claim one child.  The IRS goes by custody---who the child(ren) lived with the most.

Are you the custodial parent?  Do you have an agreement with the other parent to allow the other parent to claim them--due to divorce or that you live apart and share custody?  Did one of you sign a Form 8332?

If there is a signed 8332 then the custodial parent retains the right to file as Head of Household, get earned income credit and the childcare credit.  The non-custodial parent gets the child tax credit for children under the age of 18.

As far as the IRS is concerned, the custodial parent is the one with whom the child spent the most nights during the tax year--at least 183 nights.

[Critter-3]

Well dear  "well intentioned EX" ... since she will get the entire credit on her return she needs to pay you back the amount to make you  whole since your credit may be reduced because you are not claiming all the kids.

And make sure she understands that SHE didn't get ANY advance payments when she comes to that place in the program  ... what you gave her was YOUR advance.    

[Opus 17]

1. You are responsible for the entire amount of the IRS has on file for you. They will mail a letter. 

2. If you are recently divorced and filed married last year, it may be that the IRS has on file that half the payment was sent to your ex even though it was sent to a bank account that you control. Your ex needs to check to see if they are getting a letter themselves.

3. if the children lived in your custody more than half the nights of the year, you must give your ex a signed form 8332 to allow them to claim one child. Your ex will indicate in their tax program that they did not have custody but they are claiming the child with the form 8332, and they will be required to mail the form 8332 to the IRS after e-filing.

The reason it is done this way is that the ability to qualify for head of household status, the dependent care credit, or EIC only stays with the parent who had custody more than half the night of the year and can’t be transferred. If your ex claims that the child lived with them when the child did not, you may be limiting your own tax benefits and allowing your ex to claim tax benefits that they are not legally entitled to. Both of you could be complicit in tax fraud.

On the other hand, if the children lived in your ex’s custody more than half the nights of the year, you can’t claim any of the children as dependents unless your ex gives you a signed form 8332, no matter what the court order says. The IRS follows its own federal tax laws which supersede state court orders.

4. You will need to wait to get your IRS letter to understand how much credit is on your account and how much credit is on your ex’s account, before you will be able to figure out who owes what money to whom.