Is my girlfriend at risk of losing medi-cal if I choose to claim our baby?

[msong06]

Hello,

We all live together, not married with 1 child and she does not work and atm is receiving medi-cal for them both plus snaps and other benefits. Would I be able to claim our baby  without her losing medi-cal benefits for them both?

[Bsch4477]

Medi-cal eligibility may differ from state to state. Best to talk to your local Medi-cal office to discuss. 

[NCperson]

@msong06 - you should be asking the question about BOTH your child and your girlfriend.  If she lived with you ALL YEAR and does not work, you can claim her as well.  Assuming you claim the baby, your filing status is HOH.  Claiming both of them is worth UP TO $2500. I suspect you are eligible for EITC as well.

When was BABY born? depending on the answer you get to your Medi-CAL question, if Baby was born in 2022, I'd go back and amend that tax return. 

I can'r imagine claiming your child and girlfriend affects your medi-cal coverage - these are federal credits and not income, but suggest calling and posting back the answer. 

[Opus 17]

@NCperson 

State benefits may very well be affected by the other support available to the recipient, such as, do they live with someone who provides for them, and what is that person's income.  Only someone familiar with the rules of this particular program in this state could answer, although I would try to find a social worker to talk to before I called the state agency itself.

@msong06 

The tax laws do allow you to claim your child as a dependent if the child lives in your home more than half the year (or more than half the time since their birth, if they were born during the year).  Claiming your child would give you up to a $2000 child tax credit, and may make you eligible for EIC, depending on your income.  It would also make you eligible to file as head of household which has lower tax rates than filing as single.

You may also be able to claim your GF as a dependent, if she lives in your home the entire year, and you provide more than half her support, and she has less than $4700 of taxable income.  Support provided by you includes a share of your rent or mortgage, utilities, food, and other housing expenses.   (A 1/3 share if there are three people in the home.)  If she receives support from the state, such as SNAP, welfare, food stamps, medical insurance, or other benefits, or money from family, friends, church, etc., that counts as support not provided by you, and you have to add up all the support to see if you provide more than half.  However, benefits provided to her child don't count as benefits provided to her.  Claiming her as a dependent would qualify you for a $500 credit but does not increase your EIC. 

However, we can't tell you about the rules for Medi-Cal, and whether your support will affect the benefits she or her child gets.  If you are hiding from Medi-Cal that you are living together and supporting her and the child, then claiming them as dependents will disclose that support to the state (through your state tax return).  However, I don't think putting it on the tax return will change anything if you have already disclosed to the state that you are helping to support them.  But only an expert in Medi-Cal rules can tell you for sure. 

[Mike9241]

for federal income tax purposes your GF cannot claim the child.    the tax rules say that when both parents are eligible to claim the child, which seems to be the case here, the one with the highest adjusted gross income is the one that can claim them. 

[Opus 17]

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@Mike9241 wrote:

for federal income tax purposes your GF cannot claim the child.    the tax rules say that when both parents are eligible to claim the child, which seems to be the case here, the one with the highest adjusted gross income is the one that can claim them. 

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I'm sorry, but that's only partially correct.  The tiebreaker rules apply when the parents can't agree.**  If the parents both agree that the parent with lower income can claim the child, it's fine.  As a practical matter, unmarried parents living together with a child usually need to prepare their tax returns both ways, to see which is best.  If the lower income parent claims the child, they might qualify for less of the child tax credit, but might get more EIC.  But likely neither parent can claim head of household status.  If the higher income parent claims the child, they may get a larger child tax credit and can use head of household status, but might get less EIC.  It needs to be tested both ways to be sure. 

**specifically, the tiebreaker rule is

• If the parents don't file a joint return together but both parents claim the child as a qualifying child, the IRS will treat the child as the qualifying child of the parent with whom the child lived for the longer period of time during the year. If the child lived with each parent for the same amount of time, the IRS will treat the child as the qualifying child of the parent who had the higher AGI for the year.

Therefore, if both parents qualify to claim the child but only one parent actually claims the child, this tiebreaker is not triggered.  It doesn't matter what their income is as long as only one parent claims the child.

[NCperson]

@Opus 17 why? 

<<But likely neither parent can claim head of household status.>>

if the 3 of them (two parents and one child) all lived together for at least 6 months, one of the parents paid more than 50% of the household expenses and would qualify for HOH.  

[Critter-3]

https://www.dhcs.ca.gov/individuals

https://www.cdss.ca.gov/calfresh 

[Mike9241]

i dis agreE with @Opus 17 opinion.

mine is that if a child is the QC of more than one individual irc 152)(c)(4)

I.R.C. § 152(c)(4)(B) More Than 1 Parent Claiming Qualifying Child — If the parents claiming any qualifying child do not file a joint return together, such child shall be treated as the qualifying child of—
I.R.C. § 152(c)(4)(B)(i) — the parent with whom the child resided for the longest period of time during the taxable year, or
I.R.C. § 152(c)(4)(B)(ii) — if the child resides with both parents for the same amount of time during such taxable year, the parent with the highest adjusted gross income.

[NCperson]

@Mike9241 @Opus 17 well, I think you are both correct; it's just a matter of wording.

if the child lived with two unmarried parents @Mike9241 regs say the higher income parent gets to claim the child because of what the regs state.  But the 2nd and 3rd reg stated ARE the tie-breaker rules that @Opus 17  states!  @Mike9241 , as you stated the higher earning parent CAN claim them, but it is not an absolute that they MUST claim them.

and that higher income indiviudal has the right to permit the lower earning parent to claim the child! because of the way CTC and EITC work, it is not likely that the lower earning parent should claim the child, but as stated, the tax return needs to be completed both ways to see what is more advantageous.  

[Opus 17]

@Mike9241 

It's right in the title of the regulation, "More Than 1 Parent Claiming Qualifying Child" (emphasis added).

If only one parent claims the child, the tie breaking regulations are not triggered. 

[Opus 17]

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@NCperson wrote:

@Opus 17 why? 

<<But likely neither parent can claim head of household status.>>

if the 3 of them (two parents and one child) all lived together for at least 6 months, one of the parents paid more than 50% of the household expenses and would qualify for HOH.  

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If parent A, parent B and child C live together, the only person who qualifies to file as head of household is a parent who both pays more than half the household expenses and claims a qualifying person (usually a qualifying child dependent.)  If the parent who pays less than half the household expenses claims the child as a dependent, they can't file as HOH because they fail the household expense test, but the parent who pays more than half the expenses also can't file as HOH because they don't have a qualifying person.

When two parents live apart and share custody, there is a rule that may allow the parent where the child lives to use the child as a qualifying person for HOH even if the other parent (where the child does not live) claims the child tax credit.  This rule is not available for two parents living together unmarried and sharing custody.

[NCperson]

@Opus 17 -  it is only a requirement that a Qualifying Relative (normally a child) LIVES with you ; there is no requirement that the taxpayer CLAIM a qualifying relative to obtain HOH filing status. 

https://www.irs.gov/pub/irs-pdf/p501.pdf

page 8 left side:    A qualifying person lived with you in the home for more than half the year

So two unmarried parents living together and the child lived with them for more than 6 months: Parent A provides more than 50% of the household expenses files HOH and Parent B files SINGLE.  Those filing status' do not change even if Parent B claims the child.   

Can you provide the IRS pubication that supports this rule: 

<<This rule is not available for two parents living together unmarried and sharing custody.>>

[Opus 17]

@NCperson 

No.  Look at table 4, "who is a qualifying person".

The first row shows the case where the qualifying person is a qualifying child who lived with you more than half the year.  "Qualifying child" is defined in the dependent section, and is a dependent who meets certain tests.  That's where we get dragged into what happens if a child qualifies to be claimed by more than one person, and the tiebreaker rules that apply if a child is claimed by more than one person.

The bottom line is that in this case, with two unmarried parents living together with their child, the child can only be a qualifying person for HOH for taxpayer A if the child is also a qualifying child dependent for taxpayer A.  If A doesn't claim the child dependent, the child is not a qualifying person for HOH.  Turbotax will not transmit a tax return for HOH unless the child is listed as a dependent.  If taxpayer A wants to use the child as a qualifying person for HOH, while taxpayer B wants to use the child to qualify for the child tax credit and EIC, this will be rejected.  (And turbotax will only allow the attempt if the taxpayers invoke the special rules for parents who live apart and share custody.)  If it goes through on paper, the IRS will send investigation letters to both taxpayers.  This has happened dozens of times in this forum, usually because unmarried parents who live together and share custody misunderstand the custody questions in the dependent interview. 

It just won't go through the system the way you want it to.  This is 15 years experience talking.  A child can only be a qualifying person for HOH if (a) they are first a qualifying child dependent, or (b) the taxpayers invoke the special rules for children of divorced or separated parents. 

[NCperson]

@Opus 17 @Sorry to belabor this 

please run the scenario through the IRS filing app …..

https://www.irs.gov/faqs/filing-requirements-status-dependents/filing-status#collapse-2

To qualify for head of household filing status, do I have to claim my child as a dependent?

Answer:

Generally, to qualify for head of household filing status, you must have a qualifying child or a dependent.

However, a custodial parent may be eligible to claim head of household filing status based on a child even if the custodial parent released a claim to exemption for the child.