1st time filing after divorce - questions about HOH, Form 8332, Child tax credit, Dependant care credit

[Dev333]

This is the first year I am filing by myself (not married) post divorce.

I have 2 children.

The children live in a 50/50 custody agreement between the parents. Each parent has them the same amount of time each year.

My divorce agreement states that each parent takes 1  child each year when it comes to the taxes, and we alternate which child that is between us based on the year.

This brings up several questions for me:

1) Can I file as "Head of Household" since the children are with me exactly half the year (not over half)?

2) My understanding is each year I have to complete form 8332 and list the child I am "giving up" for that year and hand it to my ex. Correct?

3) The child tax credit is greater for the first child and less for the second. We have 2 kids, but each of us only gets 1 child for tax purposes (which alternates if it's the younger or older). When I do the calculations for the child tax credit am I claiming the amount for the Older or Younger child?  (Example lets say this year I get the younger child, which being the second born is the lower credit...am I getting the credit for the first or second child. In other words the 2nd child is the lower amount, but on my taxes I only have 1 child listed for the year so does that allow me to get a higher amount)?

4) Regardless of form 8332 and the fact I only get 1 of the 2 children each year, when I do the dependent care credit can I put in the amount I paid for aftercare/summer camp for BOTH children because I do pay for just over half of the care for both kids each year?

[Vanessa A]

1) It depends. Since there are 365 days in the year, one of you would have to have the child at least one night more than the other.  It is not based on the court order, it is based on the actual time that the child is in your home.  So, if you both have one child at your home an extra night or 2 during the year, then you both would be able to claim that child and file as  Head of Household..

2) Yes, if you are going to revoke and release a child every year, you would both need to fill out and attach a form to your returns.

3) How old are your kids?  The child tax credit is $2,000  per child, it is not based on age.  So when you say it is lower for the second child I am not sure what you are referring to?   As long as your child is under 17, it is the $2,000 child tax credit.  If your child is 17 or older then they no longer qualify for the child tax credit, instead they get the $500 Other Dependent Credit.

4) No, Only the custodial parent can claim the Child and Dependent Care Credit. 

• The noncustodial parent can't treat the child as a qualifying person even if that parent is entitled to claim the child as a dependent under the special rules for a child of divorced or separated parents. Pub 503

Divorced or Separated Individuals

[Dev333]

Thanks for the info! A follow up below to clarify some of my questions:

1) there are 365 days in the year which is 182.5 when divided by half. Our marriage separation agreement has us split the children 50/50. That said, unless I literally record each day I have the children, there is no way I know if I have them 183 days in a given year. Can I assume I may NOT file as head of household in this case since it's 50/50 in our agreement, without any form of recording?

3) My mistake. My 2 kids are both under 17. Based on what you said, it does NOT matter if I get the older or younger child based on the year (odd/even as this is how we alternate who gets what child). In all cases I'd get a $2000 credit while the child I get for a given year is under age 17. Maybe I was thinking of the child DEPENDENT EXEMPTION, which I understand was eliminated for now under the tax cuts and job act.

4) Still a bit confused.  I have 2 children, each parent only gets 1 of them per year when form 8332 is completed. We alternate between the children each year.

When it comes to aftercare/camp, I pay half of those aftercare fees for BOTH children. My ex pays the other half.

When I do the taxes, in regard to the child and dependent care credit, I'm only allowed to enter the amount I paid for ONE child even though I paid fees for both kids?

[Hal_Al]

For taxes, the first thing you need to do is get it out of your head that you have 50/50 custody. For tax purposes, there is no such thing as joint custody, regardless of what your legal agreement says. The requirement, to be custodial parent, is that the child live with you MORE than 50% of the time. One of you has to be the custodial parent and the other the non-custodial parent. The IRS goes by physical custody, not legal custody. 

In the rare case (could probably only happen in a leap year like 2024), where the time that  each parent has the child is exactly equal, then the parent with the higher income (AGI) is the custodial parent, for the purpose of determining who has first priority on claiming the child as a dependent. But then neither parent can claim a Qualifying Child dependent, for some tax benefits because neither parent had the child the required MORE than half the year. (no earned income credit,  based on that child, and the child would not qualify the parent for Head of Household filing status).

Yes, the IRS expects you to count the numbers of nights the child sleeps at each parent's home. It is allowed  for you to arrange the children's schedules so that one child spends more than half the year with the father while the other spends more than half with the mother. Then you are each the custodial parent of one child.

It is allowed  for you to arrange the child's schedule so that the child spends more than half the year with the father one year and more than half with the mother  the next year so that you are each the custodial parent in the year you claim the child, so that you can claim full benefits.

Equal number of nights. If the child lived with each parent for an equal number of nights during the year, the custodial parent is the parent with the higher adjusted gross income (AGI) (2012 Pub 17 pg 28).

Form 8332 is not required  if you arrange their schedules so that the child you claim is with you more than half the year (or the parents agree to say it's so). 

[Dev333]

thank you!