Dependents

[LargeMarge]

Last year my partner’s income was around $108,000 and mine was under $3,000. We have two kids and usually both claim one but his income is normally closer to $30,000 and mine closer to $15,000. Would it be more beneficial for our family if he claims both kids? Would we be able to claim the child tax credit? 

[DawnC]

Are you both the parents of both children?  If so, you have options with the Child Tax Credits.   You have to have $2500 in earned income to qualify for the Additional Child Tax Credit (the refundable portion) - you said under $3k, but not sure how much that is.   Your partner is not going to qualify for any Earned Income Tax Credit.  

If the child is not YOUR child, you won't qualify for the Child Tax Credit, only the $500 Other Dependent Credit.  

Additional Child Tax Credit

Earned Income Credit

IRS Interactive Assistant - you can use this tool at the IRS to figure out your best option.  

[LargeMarge]

We are both the parents of both kids. 
My income was $2,504. Just barely! 

[Opus 17]

My guess is that your partner should claim both children this year.  With only $2500 of earned income, you will only get a small earned income credit and a small child tax credit (you won't get the full $2000 child tax credit in your situation).  The other parent will qualify for the full child tax credit, which will probably be larger than any child tax credit and EIC you could claim.  But that's just a guess.  You have to test it both ways to know for sure.  Be careful not to file your test tax returns by accident.  Once you know what you want to do, be very careful to only file according to the method you decide. 

[JamesG1]

I assume that you and your partner are the parents of the two children and either one of you are able to claim the children as qualifying children.

The children must meet the requirements of a qualifying child or a qualifying relative in order for you to claim them on your tax return. 

The tests for a qualifying child are:

• Relationship: Must be your child, adopted child, foster child, brother or sister, or a descendant of one of these (grand or nephew).
• Residence: Must have the same residence for more than half the year.
• Age: Must be under age 19 or under 24 and a full-time student for at least 5 months. They can be any age if they are totally and permanently disabled.
• Support: The dependent must not have provided more than half of their own support during the year.
• Joint Support: The child cannot file a joint return for the year.

The tests for a qualifying relative are:

• Qualifying Child: They are not the “qualifying child” of another taxpayer or your “qualifying child.”
• Gross Income: The dependent being claimed earns less than $4,700 in 2023.
• Total Support: You provide more than half of the total support for the year.
• Member of Household or Relationship: The person (a friend, girlfriend, non-blood relative) must live with you all year as a member of your household or be related to you.

TurboTax software will ask you simple questions and give you the tax deductions and credits for which you are eligible based upon your answers.

Opus 17 is correct.

You should prepare provisional tax returns with each of you claiming the children and each of you not claiming the children.  Then determine which combination provides the result that you prefer.

[LargeMarge]

Thank you! That is very helpful.