Can I list my child as nondependent on my tax return if HOH parent lives in same household as us and is claiming child as a dependent?

[snikkkki]

Not finding a clear answer and there's no where for me to indicate on the return that we live together. It just assumes we're separated. 

[jerry2000]

Are you legally married? are you unmarried? what is the status?

[snikkkki]

Oops sorry meant to say we're unmarried.

[macuser_22 · Accepted solution]

If you both live with the child, you can agree who claims the child and all the benefits. The child can only be on one return and not on the other at all. The benefits cannot be split.

The dependent interview is confusing since it asks about custody without really explaining what that means. That can lead you to answer the questions in a manner that gives credits to both parents when they both live with the child which is not allowed. The child can only be on one parents tax return and not on the other at all.

*Only* divorced or separated parents that have lived apart for the last 6 months of the year can have a *custody* agreement. The parent that physically lived with the child is the custodial parent and the parent that did not live with the child the non-custodial parent. Under those circumstances the custodial parent can release the child's exempt to the non-custodial parent who did not live with the child with a 8332 form (which is a custody agreement).

When *both* parents live with the child, no such custody agreement can exist since both parents have equal custody and there is no non-custodial parent. The dependent and all the benefits can only be claimed by one parent.

============

Qualifying Child of More Than One Person

Sometimes, a child meets the relationship, age, residency, support, and joint return tests to be a qualifying child of more than one person. Although the child is a qualifying child of each of these persons, only one person can actually treat the child as a qualifying child to take all of the following tax benefits (provided the person is eligible for each benefit).

1) The exemption for the child.
2) The child tax credit.
3) Head of household filing status.
4) The credit for child and dependent care expenses.
5) The exclusion from income for dependent care benefits.
6)The earned income credit.

The other person can’t take any of these benefits based on this qualifying child. In other words, you and the other person can’t agree to divide these benefits between you. The other person can’t take any of these tax benefits for a child unless he or she has a different qualifying child.

https://www.irs.gov/publications/p17/ch03.html#en_US_2016_publink1000204278

[Critter]

The program does ask if another adult lives in the home and the relationship to that child to help you  decide who should claim the child however this is the most difficult part of the tax return (filing status, dependents & child credits) which can be easy to mess up no matter how the program is designed.

[jerry2000]

Then if your child is already being claimed as a dependent and as qualifying person for HOH, there is no tax advantage to you to list the child and if you do your return will probably be rejected.

[snikkkki]

Ok thanks, so to be clear, I should just not list my childs information at all when it asks me? I answered all questions truthfully: he lives with me the whole year, I do not provide more than 50% of his living expenses, and the other parent will be claiming him as a dependent.  It put him in as nondependent and said although I can't claim him it could give me other benefits, and it showed up as me getting the EIC.

[jerry2000]

If the other parent is claiming the child for EIC you will not get it.

[Critter]

If both parents and the common child live in the same household then ONLY ONE parent can claim the child for ALL the child related tax advantages.... the other parent should NOT enter the child in their program at all.

[hannahahaley]

I am having the same issue. If I were to say I dont have any children and not include them on  my tax return that would be a lie. So when people say "dont add them on your tax return at all" that is misleading. My S/O (unmarried, living together) is the head of household; provided for us by himself for more than half the year. Then, when I started working I started an HSA and FSA for dependent care. It makes no sense at all that I would not be able to get a deduction for the FSA, HSA, and health insurance that I provided for my children. Yet he should be able to claim them as dependents as he did provide for them for more than half of the year and is head of house hold. Would it be possible to skip the earned income credit and still get credit for the FSA, HSA, and health insurance provided by itemizing my deductions instead of taking the standard deduction?

[macuser_22]

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@hannahahaley wrote:

I am having the same issue. If I were to say I dont have any children and not include them on  my tax return that would be a lie. So when people say "dont add them on your tax return at all" that is misleading. My S/O (unmarried, living together) is the head of household; provided for us by himself for more than half the year. Then, when I started working I started an HSA and FSA for dependent care. It makes no sense at all that I would not be able to get a deduction for the FSA, HSA, and health insurance that I provided for my children. Yet he should be able to claim them as dependents as he did provide for them for more than half of the year and is head of house hold. Would it be possible to skip the earned income credit and still get credit for the FSA, HSA, and health insurance provided by itemizing my deductions instead of taking the standard deduction?

---

Once again, the tax law says that when a child can be the qualifying child dependent of more then one taxpayer then only *one* can claim the child and *all* the benefits - they cannot be split.   If you cannot agree on who claims then the IRS has tie breaking rules that they will apply,

Qualifying Child of More Than One Person

[Quote from IRS Publication 501]
Sometimes, a child meets the relationship, age, residency, support, and joint return tests to be a qualifying child of more than one person. Although the child is a qualifying child of each of these persons, only one person can actually treat the child as a qualifying child to take all of the following tax benefits (provided the person is eligible for each benefit).

1. The child tax credit or credit for other dependents.
2. Head of household filing status.
3. The credit for child and dependent care expenses.
4. The exclusion from income for dependent care benefits.
5. The earned income credit.

The other person can’t take any of these benefits based on this qualifying child. In other words, you and the other person can’t agree to divide these tax benefits between you.

Tiebreaker rules.

To determine which person can treat the child as a qualifying child to claim these five tax benefits, the following tiebreaker rules apply.

1 - If only one of the persons is the child's parent, the child is treated as the qualifying child of the parent.

2 - If the parents file a joint return together and can claim the child as a qualifying child, the child is treated as the qualifying child of the parents.

3 - If the parents don't file a joint return together but both parents claim the child as a qualifying child, the IRS will treat the child as the qualifying child of the parent with whom the child lived for the longer period of time during the year. If the child lived with each parent for the same amount of time, the IRS will treat the child as the qualifying child of the parent who had the higher adjusted gross income (AGI) for the year.

4- If no parent can claim the child as a qualifying child, the child is treated as the qualifying child of the person who had the highest AGI for the year.

5 - If a parent can claim the child as a qualifying child but no parent does so claim the child, the child is treated as the qualifying child of the person who had the highest AGI for the year, but only if that person's AGI is higher than the highest AGI of any of the child's parents who can claim the child.

Subject to these tiebreaker rules, you and the other person may be able to choose which of you claims the child as a qualifying child.
[end quote]

https://www.irs.gov/publications/p501#en_US_2018_publink1000220917

[Critter]

First it is not a lie to not enter the child ... the child is a qualifying child for 2 people and if you are not the one going to claim the child you should not enter them in the program at all ... I admit the program is a bit lacking in this section as it does not explain it well.

Next, for the FSA ... sorry but you lose this benefit because you do NOT have a qualifying child on the return ... another reason for looking forward to determine the best situation for all parties involved. 

As for the HSA and health insurance ... you do not need a dependent to have either in a family plan since you could have a 25 year old on your insurance and not claim them on your return. 

I highly recommend you BOTH  seek local professional assistance to get educated on your options for claiming common dependents.  Only by reviewing both returns with and without the child can you see the best filing for all involved.