Credits and dedication/ custody agreement

[nonsensenecropsy13]

I was reading posts related to this issue however I want to be sure I'm understanding it...

  My daughter's father and I, never married, have signed a custody agreement stating that we will take turns claiming our child on taxes.

   In case it makes a difference ,

**He has failed to pay child support all year. He has made some payments randomly but, not a full month of ordered support. ($590 per month ordered support vs a total of $2,400 that he actually paid this whole year) **Our child lives with me full-time and visits him for weekends and holidays. 

 I have 3 questions:

1)  Can he legally claim her if she lives with me and he hasn't paid support, even with the custody agreement? ( Agreement states "if the parent is unable to claim the deduction, the other parent is allowed to claim...)

 2) I am under the impression that for the EITC, I would still claim her as a dependent,while he would claim ONLY the CTC. I could still also claim head of household. Is that correct? 

 3) we have a long distance parenting plan which requires me to drive several hours ,and stay overnight in a hotel , to accommodate his visits. Is there anywhere or anyway to include that as a deduction under childcare tax credit, or any other credit or deduction? 

  I am self employed and my taxes are 13%. It is a newly signed custody agreement so I have been claiming our child as a dependent when I calculated quarterly taxes. Obviously at the end of the year, it will make a significant difference if I am not allowed to to claim her at all. Any advice/info would be greatly appreciated!

[xmasbaby0]

The IRS cares about physical custody.   The parent with whom the child spent at least 183 nights is the custodial parent.   Paying child support is irrelevant to whether the other parent can claim the dependent.  Child support paid or child support received is not even entered on a tax return.  There are no deductions for traveling or taking the children for visits to the other parent.

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 17.

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.

[Opus 17]

1. No.

2. Yes in effect, but not quite the way you describe.

3. No.

The IRS does not follow state custody orders and they do not evaluate which parent is following or not following orders.  The IRS follows where the child physically lives more than half the nights of the year.  That is the "custodial parent" for taxes, no matter what the court order says about custody.

Only the custodial parent has the automatic right to claim a child as a dependent.  The other parent can only claim the child if the custodial parent signs a release.  If the court has ordered you to sign a release and you refuse, the local family court may take action against you, but the IRS will not--without a signed release, the IRS will only award the dependent to the parent who has custody more than half the year. 

Even if you sign a release to the dependent claim, the other parent can only get the child tax credit.  The ability to claim EIC, the child care credit, and HOH status always stays with the custodial parent and can't be released, waived or shared.  In Turbotax, you would indicate the child lives with you more than half the year, but you gave the other parent a signed release.  Turbotax will assign the child a status of "Not a dependent, use for EIC and HOH only."  If the other parent tries to claim the child as a full dependent (accidentally or on purpose), you may be blocked from e-filing.  In that case, print your return and file by mail, and the IRS will eventually get around to investigating the duplicate claim.

Other than the child tax credit and the credit for child care so you can work, there are no special deductions for raising a child.  Whether it is horseback lessons or an expensive trip for custody reasons, that's just part of life and not specially deductible.