How to remove child tax credit or restart my taxes?

[Hal_Al]

Q.  Can we we each take one of the credits ($2,000 Child Tax Credit and the $1,100 for the two child stimulus payments)?

A. No. 

Q. Does 8332 force only one person take all those credits?

A. Yes, essentially.  See "special rule" for divorced parents above.  "The tax benefits may not be split in any other manner".  The recovery rebate credit is new (and temporary) but it goes with the dependency/child tax credit. 

[Dnaangela999]

How will signing over these credits affect who will receive the pre-payments of the increased Child Tax Credits that are expected to go out later this year?  Assuming income limits are not exceeded, of course.

[DaveF1006]

It depends. It doesn't specifically say who will receive the payments but it is my best guess that whoever claimed the credits in 2020 will receive the advanced payments of the Child Tax credit in 2021. It's based off of the 2020 tax return. Here is a Dept of Treasury fact sheet that explains more about the advance payment.

[Edited 04-14-2021|01:17 PM PST]

[Dnaangela999]

I see TT has the Dependents section blank on page 1 of my 1040.  If I’m signing form 8332 over to my ex-husband, does he put our child’s info in that section on his 1040?

[DawnC]

Yes, if you give your ex a signed Form 8332, he will list the child as his dependent and he can claim the Child Tax Credit and dependency as the non-custodial parent.  However, as the non-custodial parent with a signed Form 8332, he is not entitled to take the Earned Income or Dependent Care credits for the child on the form.   He also cannot use the form to claim the Head of Household status, unless he has another qualifying child.  

You, as the custodial parent retain the right to claim the Earned Income Credit, Dependent Care Credit as well as the Head of Household status.   Form 8332 gives your ex the ability to claim the dependency and Child Tax Credit ONLY.      @Dnaangela999

[Dnaangela999]

And does form 8332 also give the noncustodial parent the right to claim the Rebate Recovery Credit for the child if neither of us received the 1st stimulus check (because they based it on 2018 income)?  Just want to confirm what someone else said earlier.

[Cynthiad66]

Form 8332 is the form custodial parents can use to release their right to claim a child as a dependent to the non-custodial parent. The form can be used for current or future tax years. Additionally, custodial parents can use tax Form 8332 to revoke the release of this same right.

It is the parent who claimed the child on their 2019 return but if  no Stimulus was received for the child, the person that claims the child on their 2020 tax return will be able to file for the missing Stimulus payment.

[Dnaangela999]

Hopefully this is my final question on the subject, but based on the scenario discussed above, and how I answered the questions in TT, it has carried the dependent status of my child over to my state return (Oregon).  In other words, it is not listing my child as the dependent on my return or giving me the state exemption for a dependent, which is $210.  That’s fine but I just want to make sure my ex is able to take that $210 state exemption.  Is the state even going to know, or care, that I signed federal form 8332?  Or if he takes the exemption, will the state look at his return and say “you filed as Single, so you can’t also claim an exemption”?

[DaveF1006]

It depends. He can still file single and claim the credit. This is an indicator that he can take the credit because of the signed 8332 but he can't take the Head of Household filing status because the child did not live as a member of his household for more than 1/2 year.

IRS will look at your return and his to determine the 8332 status based off of the answers in both your returns. 

Keep in mind, if your child lived with you for more than 1/2 year, you can still claim the Earned income Credit. You don't need to claim he/she as a dependent to qualify for this credit. Here are the requirements.