Need confirmation on tax rules for custodial parent?

Question

Here is the set up. I have a 5 year old daughter and I have claimed her on my taxes EVERY year. I am in Nevada and her father is in Ohio. The Ohio court FINALLY awarded Child Support last year but ruled we will alternate who claims her on their taxes and this is the first year for him. The sucky part is he hasn't had a job since October 2005 and I make $30k+ a year. She hasn't seen him in years so he has had her 0 months of the year. I sent him the form 8332 so he can claim her exemption.....

It is my understanding that he can claim her exemption as a dependant and use her for Child Tax Credit purposes.

It is my understanding that I can still use her as a "qualifying child" for Head of Household, the EITC, and for Dependant Care Expenses.

Did I understand the IRS rules correctly? I know it says over and over that these can't be split but I think there is an exception for the "Divorced/Seperated Parents" Does me signing form 8332 mean I give up ALL my claiming rights?

Well they did already tell him his refund will go into the Offset program. I'm not sure he will get a refund though. I'm not sure he has anything to refund. He has no earned income. The court order says he needs to be "substantially current" and at least he is because his PARENTS give him the money to pay his support. There is no reason he can't get a job... except he is lazy. He's 26 years old and used to make nearly $40k. I won't hold my breath on getting offset money. I was smart enough to only sign the 8332 over for the tax year of 2006. The only thing I don't understand is that the IRS says their rules supercede court orders and their rules say I would always be able to claim her. I'm not going to fight with the state so I signed it anyway. Thanks for the help guys!

I have never been married. He has never even lived with his daughter. I have filed HOH the past 2 years and technically I am not sure I have been allowed to. For the 1st 2 years we lived with my mom and this year we live with my friend. In both cases I paid rent and both of them (mom and friend) are unmarried. Friend can't claim us a relatives so if he can't claim the HOH I will. As for my mom even though we are relatives since she has no job, just alimony then technically I make more than her. Add that with me paying rent and I THINK I have understood the rules correctly when I have claimed HOH.

Answer 1

You have it correct.

When you sign the 8332, the child's exemption and the child tax credit go over to the other parent for the time period specified in the 8332. Nothing else goes over.

File asap. If the noncustodial parent claims credits that he isn't entitled to your return may be rejected and you will have to do a paper return and wait for any refund.

If the father has no income, then the exemption and child tax credit are worth zero on his return. If by using the exemption and child tax credit he manages to get a refund, his refund will be offset by any back child support.

Added after your comments: I agree the IRS rules supersede the court order. You already sent him the 8332 so this year is a done deal.

I think you are OK with the HOH filing status.

Answer 2

Ok this is a court order therefore this is the ONLY EXCEPTION to the child living in the same house rule. (Both parents MUST HAVE the court order when they file therefore the IRS will NOT flag the childs ssn when they see it alternate each year).

Yea your right mom it sucks but hey its the system.

Now then your THIRD paragraph troubles me.

If you qualify to file as head of household, your tax rate usually will be lower than the rates for single or married filing separately. You will also receive a higher standard deduction than if you file as single or married filing separately.

How to file. If you file as head of household, you can use either Form 1040A or Form 1040. Indicate your choice of this filing status by checking the box on line 4 of either form. Use the Head of a household column of the Tax Table or Section D of the Tax Computation Worksheet to figure your tax.

Considered Unmarried
To qualify for head of household status, you must be either unmarried or considered unmarried on the last day of the year. You are considered unmarried on the last day of the tax year if you meet all the following tests.

You file a separate return (defined, earlier, under Joint Return After Separate Returns).

You paid more than half the cost of keeping up your home for the tax year. THIS IS WHAT KILLS MOST HEAD OF HOUSEHOLDS this means any property taxes, rent whatever. If you pay 100% then your status is SINGLE!

*add on the HOH rule also applies to whoever made the MOST money AND who own the property you are currently living at. In otherwords if friend is owner you CANNOT file HOH. If Mom made the most money YOU CANNOT FILE HOH.

Your spouse did not live in your home during the last 6 months of the tax year. Your spouse is considered to live in your home even if he or she is temporarily absent due to special circumstances. See Temporary absences, later.

Your home was the main home of your child, stepchild, or eligible foster child for more than half the year. (See Home of qualifying person, later, for rules applying to a child's birth, death, or temporary absence during the year.)

You must be able to claim an exemption for the child. However, you meet this test if you cannot claim the exemption only because the noncustodial parent can claim the child using the rules described later in Children of divorced or separated parents under Qualifying Child or in Support Test for Children of Divorced or Separated Parents under Qualifying Relative. The general rules for claiming an exemption for a dependent are explained later under Exemptions for Dependents.

You are only giving up your claiming rights once every two years (again its the system)

Answer 3

That is the shittiest situation for you and I am sorry you have to go through it. My ex husband is a piece of **** too but I get to claim the kids because they live with me.

I wish you luck with this!