wiscmommy85

Court ordered JOINT CUSTODY and EIC

10 posts in this topic

Hello,

I have a question about taxes.....

 

So my ex and I have a signed, filed court agreement to alternate our 13 year old daughter every other year for tax purposes.  We have "joint custody" on paper but she lives with me majority of the year, only seeing him every other weekend and the holidays that he gets, and 2 weeks of vacation per year. So in total, maybe 80-100 days per year.  2016 tax year is his year to claim our daughter.  I was told by my accountant that he can claim her as an exemption and the child tax credit BUT he CANNOT claim her for the EIC because he does not have her majority of the year.  Does this hold true even though we have "joint custody"?  Is he entitled to the EIC for 1 year then I am the next OR am I entitled to the EIC and he gets the exemption and child tax credit no matter what; due to where our daughter actually resides majority of the year regardless of the court agreement??  Also, he makes $28 per hour, so I think he makes to much for the EIC regardless.  Does that entitle me to it then because she lives with me and my income allows for me to claim the EIC?  Any insight would be greatly appreciated.  Thanks so much!

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Your accountant is correct - he cannot claim EIC (or the child and dependent care credit or Head of Household Status) but you can if you qualify.  These can only be claimed by the custodial parent.  The custodial  parent is the parent the child lived with for more than 183 days in 2016.  The terms "joint custody", "50/50 custody", "shared custody", etc. are not terms used to determine custody for the purposes of claiming an exemption.

 

If you are the custodial parent you can claim those three items (EIC, CDDC and HOH) every year, including years he claims the child's exemption and child tax credit..

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So what if he filed already and tried to get the EIC?  Can I still try to get it.  He makes a ton more money than I do and I cannot for see him even getting the EIC to be honest.  So, the court document has precedent over what then?  Shared custody really doesn't have impact on tax filing unless I want to be nice and let him claim the EIC or could he never actually claim it because I claimed it the 1st year and she does live with me?

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31 minutes ago, wiscmommy85 said:

So what if he filed already and tried to get the EIC?  Can I still try to get it.

 

For starters, are you claiming to know that he has claimed it on his 2016 return?  Or is this a hypothetical question?  You mentioned that he "makes a ton more money than [you] do," so I have to wonder if he even qualifies for the credit.

 

In any event, you can claim the credit on your return (assuming you qualify).  If both you and your ex claim your child for purposes of the credit, the IRS will investigate to determine which of you is entitled to the credit.  If he claims it and is not entitled to it, his return will be recalculated and he probably will owe additional tax (plus the various blood money that the IRS extracts in cases like these).

 

 

35 minutes ago, wiscmommy85 said:

So, the court document has precedent over what then?

 

You haven't told us what the court document says; you only summarized it by telling us that you "agree[d] to alternate [y]our 13 year old daughter every other year for tax purposes."  Keep in mind that entitlement to claim a dependent for federal income tax purposes is determined by federal tax law, not the terms of a state court divorce judgment.  As you have described the situation, under federal tax law, you have the right to claim the child every year.  However, federal tax law does provide that (1) a parent who otherwise has the right to claim a dependent child may cede that right to the other parent by signing IRS form 8332, and (2) a state court may order a parent who otherwise has the right to sign that right over to the other parent.  Have you signed form 8332?

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I do not know if he did his taxes yet.  I was just speaking hypothetical.  I honestly think he makes to much for the credit anyhow.  I am just worried that there will be an issue if I claim it.  Our daughter lives with me, her address for school is my house, I have her every single day and night except every other Friday night through Sunday evening. 

 

I pulled out our court documents and it states that we will alternate our daughter for dependent purposes and it does mention a form but I never filed anything out last year when I claimed her for the first time after our divorce and this year nothing was signed.  We just alternate.  Our court document states we have joint custody of her, which I do not agree with, but that is another story.  He only has her as previously mentioned and I do not think that is 50/50.  I have not signed anything(form 8332), the first year that we were able to file separate after the divorce was finalized I got to claim our daughter, filed as head of household, got the EIC and CTC.  There was not an issue, this year is his turn and nothing has been signed, it is just known that we switch on and off. 

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and I do not think that is 50/50.

 

You need to determine who is the custodial parent.  The custodial  parent is the parent the child lived with for more than 183 days in 2016.  If that's you and you claim the dependent you don't need Form 8332 (the form you referred to.)  if you are the custodial parent and he correctly claims the child based on your decree, he needs Form 8332 from you.

 

Quote

I am just worried that there will be an issue if I claim it.

 

If you are the custodial parent there will be no issue with the IRS.  However, if your decree states that it is his year to claim the child and you do anyway, there could be a big issue to you if he goes back to the court to enforce the decree.

 

 

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He will never agree with me who the official "custodial parent" is. 

 

I am not claiming her on my taxes for exemption/deduction purposes.  I only claimed her for the EIC.  I only made 27,000 last year and as previously mentioned, he makes roughly $30 per hour, and my account said he cannot even claim the EIC anyhow so I should claim it for 2016 regardless that he is claiming her for the deduction and child tax credits. 

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so I should claim it for 2016 regardless that he is claiming her for the deduction and child tax credits. 

 

If you are the custodial parent you can claim the child for EIC, Head of Household filing status and the child and dependent care credit even if he claims the child as a dependent.  Whether or not you or he is the custodial parent is a matter of fact.  Nothing beats a contemporaneous calendar of when the child lived with you if questioned by the IRS.

 

If you both claim the child for EIC and e-file, the second return will reject and need to be filed on paper.

 

If two returns claim the same child for EIC then the IRS will pay both refunds, but will come back in 12 or more months to determine which return is correct.  At that time, you would need to support that you are the custodial parent.

 

Suggestion:  If you are the custodial parent file early, so your return is not the one that rejects.

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1 hour ago, wiscmommy85 said:

I do not know if he did his taxes yet.  I was just speaking hypothetical.  I honestly think he makes to much for the credit anyhow.  I am just worried that there will be an issue if I claim it.

 

Well...you have three choices:  (1) ask him if he did or intends to claim the credit; (2) don't ask him and don't claim the credit yourself; or (3) don't ask and claim it yourself and see what happens.  Seems to me that the first option is the smart way to start.

 

 

1 hour ago, wiscmommy85 said:

Our court document states we have joint custody of her, which I do not agree with, but that is another story.  He only has her as previously mentioned and I do not think that is 50/50.

 

"Joint custody," as a legal concept does not equate to "50/50" or any other particular time split.

 

 

1 hour ago, wiscmommy85 said:

I have not signed anything(form 8332)

 

That could be a problem for your ex if he is ever audited.  Of course, as you have described it, you are under court order to execute the form, so you'd be risking a contempt citation if he were to ask and you refused.

 

 

1 hour ago, wiscmommy85 said:

He will never agree with me who the official "custodial parent" is.

 

Whether or not you agree about the application of a label is irrelevant.  As I mentioned previously, federal tax law determines who may claim the child, and while federal tax law does use the term "custodial parent," the definition of that term isn't necessarily the same as the definition under state family law or as it is used colloquially (by the way, whether one is or isn't the "custodial parent" is a legal conclusion based on whatever facts are applicable; it is not merely a question of fact).

AdjunctFL likes this

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On 2/7/2017 at 5:18 PM, wiscmommy85 said:

Does that entitle me to it then because she lives with me and my income allows for me to claim the EIC?  Any insight would be greatly appreciated.  Thanks so much!

 

Yes. Under the facts stated in this thread you are the custodial parent for purposes of federal income tax because the child lived with you for the greater part of the tax year (i.e. more than 183 days of the year). Forget what your court decision calls the custody arrangement; for federal tax purposes that’s irrelevant. Unlike the dependent exemption, the EIC can never be claimed by the noncustodial parent. So if you meet all the requirements to claim the EIC you certainly should do so. See IRS Publication 596 for all the rules on that. If by chance he does file electronically first and your electronic return is rejected, simply refile on paper and you’ll get the credit and any refund you are due. The IRS will sort out who was entitled to it later.

 

He must have a waiver (e.g. Form 8332) attached to his return each year he claims the dependent exemption for them. That's what the law requires. If he claims them and you don’t he might not get any flack from the IRS for not having attached the form, but technically he is supposed to have it.

 

I agree with the comments made by AdjunctFL so I won't repeat everything he or she said.

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