Divorced with one 12 yo Child Health Plus Insurance and Claiming a dependant

[user17732633418]

My daughter is enrolled in NY State Child Health Plus through her mother's application.  We share custody 50/50, and I pay child support+spousal maintenance. Can I claim her as a dependent on my taxes without it being an issue with her being under child health plus through her mother? 

[DaveF1006 · Accepted solution]

Yes, you can claim your daughter as a dependent without necessarily causing her to lose her Child Health Plus (CHP) coverage. However, there is a specific way this needs to be handled to avoid triggering an eligibility review for her mother.

Here is how the intersection of IRS dependency rules and NY Child Health Plus works for you:

1. The IRS "Dependency" vs. "Residency" Rule

Under IRS rules, for 50/50 custody, the parent who has the child for 183 nights or more is technically the "custodial parent." If you have exactly 50/50 (182.5 nights each): The IRS "tie-breaker" rule gives the claim to the parent with the higher Adjusted Gross Income (AGI).

The Form 8332 Solution: If your ex-wife is technically the custodial parent but agrees to let you claim the child (perhaps you alternate years), she must sign IRS Form 8332. This allows you to claim the Child Tax Credit, while she can still file as Head of Household (if she qualifies) and keep the child on her health insurance application.

2. How NY Child Health Plus Sees "Household"

New York Child Health Plus eligibility is based on the household income of the parent who applies for the coverage. The Good News is that CHP is designed to be accessible. Unlike Medicaid, which has very strict "tax household" matching rules, CHP focuses on the child’s residence.

There may be a risk if you claim her as a dependent, your income is technically part of her "tax household." However, for non-custodial parents (or 50/50 parents who aren't the primary insurance applicant), NY State usually looks at the income of the primary household where the child resides for CHP eligibility.

3. Will it "Trigger" an Audit with New York State?

The main concern is that the NY State of Health marketplace (where CHP is managed) cross-references with IRS data. If you claim her, the system might see that she is a dependent in your tax household but receiving benefits in her mother's household.

To avoid problems for yourself and ex-wife, your ex-wife should update her NY State of Health account to reflect that the child is being claimed as a tax dependent by a "non-applicant parent" (you). NY State allows for this scenario specifically for divorced parents.