I am custodial parent and other parent is claiming child as a dependant (per agreement). Why can’t I claim defendant care using TurboTax? Last year I could

[DanielV01]

Could be because of your income level or that your child was claimed incorrectly on the other return.  How much (approximately) total income are you reporting?

[Opus 17]

Or you answered the qualifying questions wrong.  Or if you are claiming the credit but e-filing is blocked, your ex may have answered the dependent questions incorrectly.  

[brniyez17]

Reporting approx 63k I reviewed last year (mine only) and I answered the same as this year. E-filing isn’t blocked that i know of. It’s just asking me all the defendant care questions then telling me I don’t qualify for the credit but, I know I do.

[brniyez17]

Dependent (autocorrect *face palm*)

[DanielV01]

You are not filing as married filing separate, are you?  If the dependent lives with you you should qualify as Head of Household.

[brniyez17]

Yes, married filing separate. I tried to select head of household and it wouldn’t let me

[Opus 17]

The dependent care credit is disallowed for married filing separately.  If the program does not think you have a qualifying child dependent to file as HOH, you must have entered something incorrectly, or else the child really doesn't qualify this year.

Your child qualifies you as a dependent for HOH purposes if they are under age 19, or full time student under age 24; AND they don't earn more than half their own support; and they live in your home more than half the year; AND you pay more than half the total living expenses of the home where you live with your qualifying person.  They also have to be US citizens or residents.  As I stated below, check their birthdate, and how long you said they lived with you.  Also check the support question, it should not ask who else paid their expenses, it should only ask if they paid more than half their own expenses (this is unusual, think child actors, and similar situations.)

And check your own interview, did you indicate that someone else paid more than half your living expenses?

We can't see your file so we can't see which answer is disqualifying you or your child.

[Opus 17 · Accepted solution]

The child must live in your home under your care for more than half the year (183 or more nights.  The nights do not have to be consecutive.)  In Turbotax, you indicate this by choosing "7" months or more, the program interprets "6 months" as exactly half the year, which is not "more than half" and so does not qualify your child for head of household status or the dependent care credit.

You must also indicate that you are allowing the other parent to claim the child via form 8332 dependent release.  (And you must give your ex this form, otherwise their claim for the child tax credit will be denied.)

If you did not have actual physical custody of your child for at least 183 nights, then you are not allowed to claim the dependent care credit, even if you have legal or physical custody according to your court order.  The child must actually physically reside in your home with you for more than half the year.

The child must also have a valid social security number and be under age 13.  You might have made a typo in one of these areas.

You may need to delete your dependent in the personal interview and start over.

Read below for more details that cover your situation.

The only person who has the automatic right to claim a child as a dependent is the parent where the child lives more than half the nights of the year (183 or more nights).  The IRS is federal law and is not bound by state court orders.There is no such thing as "equal custody", you have to actually count the number of nights if you aren't sure. 

The custodial parent may give the non-custodial parent a signed release form 8332 that allows the non-custodial parent to claim the child as a dependent.  This allows the non-custodial parent to claim the child tax credit only.  Qualification for EIC, head of household status, and the dependent care credit, always stay with the custodial parent and can't be waived, transferred or shared.

If the custodial parent won't sign the release form, the IRS will not grant the dependent to the non-custodial parent.  The IRS does not enforce custody disputes.  But, the non-custodial parent can go to family court and ask that the custodial parent be forced to sign the form, or be held in contempt, or whatever other leverage the judge will apply.

In Turbotax, the non-custodial parent answers that they had custody less than half the year, there is a custody agreement, they do have a signed form 8332.  This will properly claim the child tax credit only.  The non-custodial parent will have to mail the form 8332 to the IRS after e-filing the rest of the return.

The custodial parent will answer they had custody more than half the year, there is a custody agreement, they will give the other parent form 8332.  The program will properly claim EIC, head of household and the dependent care credit (if otherwise qualified) and will not claim the child tax credit.

If one of the parents gets an e-file block, then someone made a mistake.

https://www.irs.gov/pub/irs-pdf/f8332.pdf

None of this applies if the parents live together unmarried and share custody.  In that case, only one parent can claim the child and the benefits can't be split.  The other parent should delete the child they are not claiming from their tax return.

[kristenmary]

I am just starting 2020. It's my year to claim my daughter and the program won't let me claim her as a dependent. This is unlike any other year as I have never had issues with the program. Our custody agreement states that I claim her in even years and he claims her in odd tax years and we have never had issue. This has become an issue when I started reviewing information from my 2019 return after importing it. Help please! 

[xmasbaby0]

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.

[kristenmary]

We don’t have the form and never have. Is this form new for this year? In 10 years of switching I have never had an issue. Like I mentioned...It almost seems a glitch in the program as I clicked that she lives with me more than 7 months of the year and then followed with yes we have a custody agreement. 

[xmasbaby0]

The 8332 form is not at all new.  It has existed for years.  And you still have not said if you are the custodial parent.  The IRS cares who the child lives with--not divorce papers, court orders or your verbal agreement.

[kristenmary]

Hmmm. I am the the custodial parent. She lives with me more days than he is her and as I said, we switch off every year who claims her and in 10 years this has never come up as an issue. He pays child support which is what entities him to the deduction as on paper he financially supports her 50/50. Neither of us have ever filled out a form either. In fact one year I accidentally claimed her, his return got rejected and I had to amend mine without her as a deduction....because the court papers did matter.