Hello mhoffman44,
Thank you for joining us today.
So you would like to know when the child tax credit phases out, and if it would be better for the lower income parent to claim the dependent children?
My first answer to this question is always this: the IRS does not care who claims the dependent children as long as only one person claims them. I always advise divorced couples to look at both tax situations and take the one with the best benefit. Many times the lower income parent gets a better tax benefit from claiming the dependents. Then I suggest that parent shares the additional refund with the other parent.
The child tax credit starts phasing out at $200,000 in income ($400,000 for married couples). If the one parent's income is over $200,000, then their is no benefit for them to claim the children in this case. Another consideration are the other credits such as Earned Income Tax Credit or Education Tax Credits.
If the divorced couple is amicable, I always suggest they file the best way possible. If they are not amicable and there is a divorce decree stating who claims the children, then that should be followed.
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