Divorced with children - Question about form 8332

This "splitting of the child" is not available to parents who lived together at any time during the last 6 months of the year; then only one of you can claim the child for any tax reasons."  Can you provide the IRS publication where this is stated?  I just want to make sure I filed correctly in 2013.  I lived with my spouse and children up until September and I claimed all the child credits (EIC/HOH/Daycare/dependent) since it was in our divorce that I had the odd years. And then we split 50/50 the rest of 2013.  If custodial parent is determined based on AgI when we both had them equal time during the year   how would we know whose is higher?

The custodial parent ( the parent the child lives with the most) has first priority on claiming the children on her taxes; regardless of the amount of support provided by the non-custodial parent. The non-custodial parent can only claim the child as a dependent if the custodial parent gives permission (on form 8332). The parent who is not claiming them does not need a form 8332. The parent claiming then does not need a form 8332, if he/she is the custodial parent.

There is a way to split the tax benefits. For future negotiations with the other parent  the following info may be of use: :

 There is a special rule in the case of divorced & separated (including never married) parents. When the non-custodial parent is claiming the child as a dependent/exemption/child tax credit; the custodial parent is still allowed to claim the same child for Earned Income Credit, Head of Household filing status, and day care credit. This "splitting of the child" is not available to parents who lived together at any time during the last 6 months of the year; then only one of you can claim the child for any tax reasons. The tax benefits may not be split in any other manner.Note in particular that the non-custodial parent can never claim the Earned Income Credit, Head of Household filing status or the day care credit, based on that child , even when the custodial parent has released the exemption to him. 

For tax purposes, there is no such thing as joint custody, regardless of what your  agreement says. The requirement, to be custodial parent, is that the child live with you MORE than 50% of the time. One of you has to be the custodial parent and the other the non-custodial parent.

"This "splitting of the child" is not available to parents who lived together at any time during the last 6 months of the year; then only one of you can claim the child for any tax reasons."  Can you provide the IRS publication where this is stated?  I just want to make sure I filed correctly in 2013.  I lived with my spouse and children up until September and I claimed all the child credits (EIC/HOH/Daycare/dependent) since it was in our divorce that I had the odd years. And then we split 50/50 the rest of 2013.  If custodial parent is determined based on AgI when we both had them equal time during the year   how would we know whose is higher?

See pages 17-18 of the instructions for form 1040. Yes, AGI governs who claims the child when time is equal.

You can claim HoH for 2013, only if you were legally divorced by year end, because you lived with your spouse during the last half of  2013.
See page 13 of the instructions for form 1040.

Was I correct in claiming EIC in 2013?       Daycare?

Maybe. Were you legally divorced and did you have the kids more than the ex, for the total year?

"This "splitting of the child" is not available to parents who lived together at any time during the last 6 months of the year; then only one of you can claim the child for any tax reasons."  Once again I ask about this statement.  I lived with my spouse up until September 2013 and divorce was final October 2013.  I claimed my 2 children per the divorce agreement.  If the "splitting of the  child" is not available for this circumstance and only on of us can claim the children fro any tax reasons then why wouldn't i be able to claim for EIC and child care since I was eligible for HOH & child tax credit?

@bergmara - The "6 month" rule only applies to parents that were not divorced, were separated under a written separation agreement, or were not married at the end of the tax year.
<a href="http://www.irs.gov/publications/p17/ch03.html#en_US_2014_publink1000170897" rel="nofollow" target="_blank">http://www.irs.gov/publications/p17/ch03.html#en_US_2014_publink1000170897</a>

I have reviewed my Turbo tax filing and tried to rerun the 1040 but Turbo tax has allowed all of these deductions that I have taken.  I guess I will wait for the IRS to tell me what I have done incorrectly?

Yes, you can claim everything for 2013; the child's exemption, child tax credit, EIC, day care credit, & HoH because you were legally divorced at year end and you had the child more  time than the ex did (or the exact amount plus the higher AGI) and only one of you is claiming the child for anything. The splitting rule was not relevant in 2013, but will be for 2014 and going forward.

I think my spouse had the higher AGI but not sure since the spouse is uncooperative in divulging that information..and there is not detailed documentation about who had the children more or less..The spouse also claimed the children so the IRS will be notifying us.

So when I claim them in 2015 I am only allowed the dependent exemption and child tax credit.  The ex will get the HOH, EIC and daycare credits?    If the ex's AGI is too high to qualify for EIC then will I be able to get the EIC?  But of course the ex has to share the AGI with me....

Q.I am only allowed the dependent exemption and child tax credit.  The ex will get the HOH, EIC and daycare credits?  
A. Yes
Q. If the ex's AGI is too high to qualify for EIC then will I be able to get the EIC?
A. No. Only the custodial parent can claim EIC. For tax purposes, there is no such thing as joint custody, regardless of what your legal agreement says. The requirement, to be custodial parent, is that the child live with you MORE than 50% of the time. One of you has to be the custodial parent and the other the non-custodial parent. Saying you had them equal time  may pass muster for 2013 (probably not) , but will not in the future.

for 2014 I should file single and not HOH correct since the ex will be claiming the children?

Yes

If I earn less than 35,000 per year and am filing single would I qualify for EIC without dependents?

No. For single, w/o kids, EIC stops at $15K

Thank you for all your help.  It is greatly appreciated.

I do not think this information is correct. Ease provide IRS publication that states dependent tax benefits can be "split". IRS Publication 17 specifically states the following "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).

The exemption for the child.

The child tax credit.

Head of household filing status.

The credit for child and dependent care expenses.

The exclusion from income for dependent care benefits.

The earned income credit.

The other person cannot take any of these benefits based on this qualifying child. In other words, you and the other person cannot agree to divide these benefits between you. The other person cannot take any of these tax benefits for a child unless he or she has a different qualifying child." Reference <a href="http://www.irs.gov/publications/p17/ch03.html#en_US_2014_publink1000204295" rel="nofollow" target="_blank">http://www.irs.gov/publications/p17/ch03.html#en_US_2014_publink1000204295</a>

Please explain where this rule is offset

@jayden0812 - The "Children of separated or divorced parents that live apart." rule.
<a href="http://www.irs.gov/publications/p17/ch03.html#en_US_2014_publink1000170897" rel="nofollow" target="_blank">http://www.irs.gov/publications/p17/ch03.html#en_US_2014_publink1000170897</a>

"Applying this special rule to divorced or separated parents (or parents who live apart).   If a child is treated as the qualifying child of the noncustodial parent under the rules described earlier for children of divorced or separated parents (or parents who live apart), only the noncustodial parent can claim an exemption and the child tax credit for the child. However, the custodial parent, if eligible, or other eligible person can claim the child as a qualifying child for head of household filing status, the credit for child and dependent care expenses, the exclusion for dependent care benefits, and the earned income credit. If the child is the qualifying child of more than one person for these benefits, then the tiebreaker rules just explained determine which person can treat the child as a qualifying child."

As you linked to.

Splitting the credit??? Wow, what a difficult thing to get to the bottom of.  So yes, under special rules for divorced parents, usually father the higher earner and noncustodial parent can claim the Dependent Exemption and the Child Tax Credits but not the EIC , Head of Household, and Child Care Expenses (which goes to mom).  AND whats neat is that the residence test of having the child over 6 months does not apply to the special situation.  SO father can have the child less than 6 months and still claim the dependency exemption.  But for the online tax software you will still have to put "7 months" to get it to process.  Some of these things are explained all over the place in bits and pieces.  I guess the IRS doesnt make it obvious.  You have to gather the info yourself to make it all whole.  Notice when the IRS answers some questions about splitting an exemption they are saying "no" to splitting the same "dependent exemption".  But you CAN split other child tax benefits, like EIC to one parents, and dependent exemption to the other parent under special divorced situation.  <a rel="nofollow" target="_blank" href="https://www.eitc.irs.gov/Tax-Preparer-Toolkit/faqs/divorced">https://www.eitc.irs.gov/Tax-Preparer-Toolkit/faqs/divorced</a>  (look at the IRS answer in bold and not the initial "no".  The trick is if separated last 6 months of the year AND form 8332 is signed.)  Also the descriptions here about a "qualifying child"  <a rel="nofollow" target="_blank" href="https://www.irs.gov/uac/A-%E2%80%9CQualifying-Child%E2%80%9D">https://www.irs.gov/uac/A-%E2%80%9CQualifying-Child%E2%80%9D</a> (notice how under residency test it says exceptions apply for special cases like divorced parents).  Form 8332 also explains a little itself how residency test does not apply.  One thing that is left confusing is if mom can still claim child tax credit if dad does not need it etc.  The IRS answers that elsewhere here and says no.  <a rel="nofollow" target="_blank" href="https://www.irs.gov/Help-&-Resources/Tools-&-FAQs/FAQs-for-Individuals/Frequently-Asked-Tax-Questions-&-Answers/Filing-Requirements,-Status,-Dependents,-Exemptions/Dependents-&-Exemptions/Dependents-&-Exemptions-3">https://www.irs.gov/Help-&-Resources/Tools-&-FAQs/FAQs-for-Individuals/Frequently-Asked-Tax-Questions-&-Answers/Filing-Requirements,-Status,-Dependents,-Exemptions/Dependents-&-Exemptions/Dependents-&-Exemptions-3</a>  Once form 8332 is signed mom signs over child tax credit and the dependent exemption.

It's not true that the non-custodial parent will still have to put "7 months" with online software. In fact, putting more than 6 months will cause TT to treat you as the custodial parent and give you the things you're not entitled to

You won't have a problem. My sons mother doesn't work so she never does taxes... That's another story.. But I always claim my son and we have nothing in writing saying who can claim him and I've never had a problem. As long as your ex doesn't try and claim them as well then you'll have no problem at all.

If the mother lives with another relative, e.g. her parent, that relative has a higher claim on the child than you do. So, there's still that possibility.