Can I file head of household under new tax laws?

[millegd2]

I am trying to determine if I can choose head of household this year for the 2018 tax year to be filed in 2019.  My ex-wife and I have 2 kids.  We were legally divorced in October 2016.  I currently rent a home, which I pay all expenses.  Our divorce agreement is for joint custody, but we do have it written in that we each can claim one child as a dependent.  She signs the IRS form to give me one child as a dependent and I do the same for her.  I have never claimed head of household prior because I worked 3rd shift and she had the kids most overnights of the year.  I have worked now on 1st shift and have the kids at night.  I will end up having the kids now more nights of the year in 2018.  Does this qualify me to file head of household?  That is the way I am reading the current tax law.  I have documented all 2018 the nights that I had them just in case I am audited.  Also, would this allow me to claim all child care expenses?

[rjs · Accepted solution]

You can file as head of household if the children lived with you more than half the nights of the year.

(A child who lives with you more than half the year qualifies you to file as head of household, even if you let your ex-wife claim that child as a dependent. But you only need one child to qualify as head of household. Since you are claiming one child, the simple thing to do is use the child that you claim as a dependent as your qualifying child for head of household. I believe that TurboTax will do this automatically.)

There is no joint custody in federal tax law, and your divorce agreement does not override the tax law. If the children stay with you more than half the nights in the year, you are the custodial parent. Since you are the custodial parent, you do not need a Form 8332 from your ex-wife to claim the children as dependents. She needs a Form 8332 from you in order to claim one of the children.

I'm not sure what you mean by "all" child care expenses. As the custodial parent, you can claim the child care credit for expenses that you paid so that you could work. You can claim child care expenses for both children, even if your ex-wife claims one of the children as a dependent. You cannot claim child care expenses that your ex-wife paid. Your ex-wife cannot claim any child care expenses, because she is not the custodial parent.

[millegd2]

Thanks!  That is what I meant by child care expenses.  I was wondering if I could claim child care expenses that I paid.  In the past I couldn't because I didn't have my children over 1/2 the year and wasn't considered the custodial parent.  

This was exactly what I was thinking for all your answer, but just wanted some more input.  I did know the federal tax law superseded our divorce agreement.  I just wanted that input since I know it will really throw my ex off when she figures out she can't claim head of household.   I plan to fill out the 8332 to give to her.  

[Hal_Al]

You need to coordinate with your EX. Be sure she isn't also claiming that the child(ren), you claim, lived with her for more than half the year.
That is, if you are giving her a form 8332 for the child she claims, that means you are the custodial parent for that child and she is the non-custodial parent. See "special rule" details below. She may not be planning on filing as a non-custodial parent, particularly if she wants to claim EIC and/or Head of Household, or day care.
_______________________________________________________________________________________________________

 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.
 So, it's good idea to let the other parent know that you will be claiming those items, as many first time divorced parents are not aware of this rule and may try to claim those items, which will cause the IRS to send out letters.
Ref: <a rel="nofollow" target="_blank" href="https://www.irs.gov/publications/p17#en_US_2017_publink1000170897">https://www.irs.gov/publications/...>
Scroll down to "Children of divorced or separated parents (or parents who live apart)"

[millegd2]

Thanks!  I do plan on letting the ex know the filing status.  I do know she will attempt to claim all these credits/filing statuses.  I am all to familiar with the letters from when she has previously tried to claim an estimated tax payment I made during our divorce year.  It caused my refund to be held up, but was easily resolved when I called the IRS.  I am just trying to get my ducks in a row.  I know I have the legal right now to file as head of household and claim daycare expenses.  I just don't want to open that can of worms until absolutely necessary after the end of the year.  Thank you again for your input. This situation is all new this year with it being the first year I have had my children more than 1/2 the nights of the year.  Any input is appreciated.

[macuser_22]

Only the parent that lived with the child more than half the year (custodial parent) can claim the child care (daycare)  credit.

Child care is "work related".  It can only be claimed if the care was necessary so that you (and your spouse if married) could work.  Only if the child lived with you more than half the year *and* the care was required so that you could work is it allowed.  If you did not live with the child or work at the time that the care was provided then it was not necessary so that you could work and therefore is not allowed.

See IRS Pub 17 page 213
<a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-pdf/p17.pdf">https://www.irs.gov/pub/irs-pdf/p17.pdf</a>

[millegd2]

Thank you!  Both children will have lived with me for more than 1/2 the year.  I refer to nights in previous posts because they are at daycare during the day.  The daycare for the dependent care credit is necessary as this is during my working hours while I am at work.  I wouldn't be able to work without this care.  So the dependent care credit is "work related" and necessary.  So in this case I would be able to claim it and would be considered the custodial parent.  Thanks again!