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While the divorce decree may state shared custody, the IRS does not recognize 50/50 custody for tax purposes. Whoever the child actually lived with more than half the nights of the year is the parent who is the custodial parent by tax law. The custodial parent may then relinquish the dependency exemption to the non custodial parent with a signed form 8332 or similar document.
Here is how the tax benefits are split. For divorced or separated parents or parents who live apart, the custodial parent, if eligible, or other eligible person who the child lived with for more than half the year, can claim head of household filing status, the credit for child and dependent care expenses, the exclusion for dependent care benefits, and the earned income credit. The non-custodial parent, if allowed by divorce decree or consent of the custodial parent on form 8332 or similar signed statement, can claim the dependency exemption and child tax credit. For post-2008 divorce decrees or agreements, form 8332 or similar signed statement is required. The child tax benefits cannot be split any other way.
So, the way I interpret all this:
My son and his ex girlfriend have joint 50/50 custody.
Despite if he has his son less that 183 days, ie 180 days, as long as she agrees to give him the rights to claim him as his dependent, he can claim head of household, and other child credits/exemptions. He does make more money.
Is this in line with what you are saying
She can relinquish the dependency to him, but he cannot file as Head of Household because the child did not live with him more than half the year. She can file as Head of Household if she otherwise meets the requirements by entering the child on her tax return and claiming him as a qualifying child. Here is how it works with divorced or separated parents:
For divorced or separated parents or parents who live apart, the custodial parent, if eligible, or other eligible person who the child lived with for more than half the year (183 nights in 2019), can claim head of household filing status, the credit for child and dependent care expenses, the exclusion for dependent care benefits, and the earned income credit. The non-custodial parent, if allowed by divorce decree or consent of the custodial parent on form 8332 or similar signed statement, can claim the dependency and child tax credit. For post-2008 divorce decrees or agreements, form 8332 or similar signed statement is required. The child tax benefits cannot be split any other way.
@hooly wrote:
So, the way I interpret all this:
My son and his ex girlfriend have joint 50/50 custody.
Despite if he has his son less that 183 days, ie 180 days, as long as she agrees to give him the rights to claim him as his dependent, he can claim head of household, and other child credits/exemptions. He does make more money.
Is this in line with what you are saying
No. If less than 183 nights (not days), then that is less than half the year. For anyone to claim a Qualifying Child dependent the child must physical live with the parent more than half the year. 365/2=182.5 so 183 nights in a non-leap year is more than half. In a leap year it would be 184 nights or more.
There is no such thing in the Federal tax law as 50/50, split, or joint custody. The IRS only recognizes physical custody (which parent the child lived with the greater part, but over half, of the tax year. That parent is the custodial parent; the other parent is the noncustodial parent.) Who can claim the exemption and credits depends on who is the custodial parent. (By the IRS definition of custodial parent for tax purposes - this is not the same as the legal custody that a court might grant.). The test that the IRS uses to determine the custodial parent is where the child lived for more than 1/2 (or greater part) of the year. The IRS will go so far as to require counting the nights spend in each household - that person is the custodial parent for tax purposes (if exactly equal and more than 183 days - The custodial parent is the parent with the highest AGI, if less than 183 days then neither parent has custody so the child cannot be claimed by either parent). And yes they are that picky. See Custodial parent and noncustodial parent in Pub 501 https://www.irs.gov/publications/p501#en_US_2018_publink1000220906 Only the Custodial parent can claim: (Child would be listed as non-dependent EIC & CC only) -Head of Household -The Earned Income Credit -The Child and Dependent Care Credit -The Health Coverage Tax Credit The non custodial parent can only claim: (Child would be listed as dependent) - The child as a dependent - The Child Tax Credit or credit for other dependents But only if specifically specified in a pre-2009 divorce decree, separation agreement or the custodial spouse releases the exemption with a signed 8332 form - after 2009 the IRS only accepts a signed 8332 form that must be attached to the non-custodial parents tax return. |
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