Child Tax Credit for non dependent child

Discussion in 'Tax' started by SMF, Jan 31, 2006.

  1. SMF

    SMF Guest

    Divorced couple with child. Mother has custody, father has
    child two nights a week. Mother earns $40,000 and gets
    $8000 in child support. Father gets dependency deduction as
    per divorce agreement. Mother appears to qualify as Head of
    Household. 2005 had a change allowing the credit for
    children who are not dependent. It seems that if the child
    lives with the mom for over half the year she would get the
    $1000 credit. Am I reading this correctly?

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    SMF, Jan 31, 2006
    #1
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  2. SMF

    A.G. Kalman Guest

    SMF wrote:

    > Divorced couple with child. Mother has custody, father has
    > child two nights a week. Mother earns $40,000 and gets
    > $8000 in child support. Father gets dependency deduction as
    > per divorce agreement. Mother appears to qualify as Head of
    > Household. 2005 had a change allowing the credit for
    > children who are not dependent. It seems that if the child
    > lives with the mom for over half the year she would get the
    > $1000 credit. Am I reading this correctly?


    You are not reading all the rules. In order to claim the CTC
    you must also claim the dependency exemption. Normally to
    claim the CTC the child must also live with you for more than
    half the year. However, the code contains an exception for
    children of divorced or separated parents as well as kidnapped
    children.

    << ======================================================= >>
    << The foregoing is intended for educational purposes only >>
    << and does NOT constitute legal OR professional advice. >>
    << >>
    << The Charter and the Guidelines for submitting >>
    << messages to this newsgroup are at www.asktax.org. >>
    << Copyright (2006) - All rights reserved. >>
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    A.G. Kalman, Feb 1, 2006
    #2
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  3. SMF

    Phil Marti Guest

    "SMF" <> wrote:

    > Divorced couple with child. Mother has custody, father has
    > child two nights a week. Mother earns $40,000 and gets
    > $8000 in child support. Father gets dependency deduction as
    > per divorce agreement. Mother appears to qualify as Head of
    > Household. 2005 had a change allowing the credit for
    > children who are not dependent.


    You've misinterpreted something. Nothing changed in 2005
    for this couple. Father continues to get the dependency
    exemption and the child tax credit. Mother is Head of
    Household and eligible for child care credit. Child is
    qualifying child of mother for EIC.

    --
    Phil Marti
    Clarksburg, MD

    << ======================================================= >>
    << The foregoing is intended for educational purposes only >>
    << and does NOT constitute legal OR professional advice. >>
    << >>
    << The Charter and the Guidelines for submitting >>
    << messages to this newsgroup are at www.asktax.org. >>
    << Copyright (2006) - All rights reserved. >>
    << ======================================================= >>
     
    Phil Marti, Feb 2, 2006
    #3
  4. SMF

    Guest

    A.G. Kalman wrote:
    > SMF wrote:


    >> Divorced couple with child. Mother has custody, father has
    >> child two nights a week. Mother earns $40,000 and gets
    >> $8000 in child support. Father gets dependency deduction as
    >> per divorce agreement. Mother appears to qualify as Head of
    >> Household. 2005 had a change allowing the credit for
    >> children who are not dependent. It seems that if the child
    >> lives with the mom for over half the year she would get the
    >> $1000 credit. Am I reading this correctly?


    The divorce decree is irrelevant unless it conforms to the
    requirements of Form 8332. The mother gets the exemption and
    the credit unless she releases it to the father in writing.

    Tim

    << ======================================================= >>
    << The foregoing is intended for educational purposes only >>
    << and does NOT constitute legal OR professional advice. >>
    << >>
    << The Charter and the Guidelines for submitting >>
    << messages to this newsgroup are at www.asktax.org. >>
    << Copyright (2006) - All rights reserved. >>
    << ======================================================= >>
     
    , Feb 3, 2006
    #4
  5. SMF

    rooth Guest

    Here is what RIA says about this topic.
    Hope it helps.

    Federal Tax Coordinator 2d
    A-3856. Impact of custodial parent's exemption release on
    other tax matters.

    A release of the dependency exemption by a custodial parent
    ( A-3851) applies for purposes of determining whether a
    child meets the definition of a "qualifying child" (
    A-3605.2). Therefore, the release will also apply for the
    child tax credit ( A-4053). 24 24. Conf Rept No. 108-696 (PL
    108-311) p. 61.

    However, the release won't apply for purposes of the earned
    income credit ( A-4210), the child and dependent care credit
    ( A-4314), and head-of-household filing status ( A-1405).
    The definition of "qualifying child" for those purposes is
    made without regard to the release provision. 25

    25. Conf Rept No. 108-696 (PL 108-311) p. 61.
    Thus, when a custodial parent is determining whether to
    release his claim to a child's dependency exemption (see
    A-3851 ), the parent should take into consideration the
    following factors regarding "side effects" the release does
    or doesn't cause to occur (the treatment described below
    also applies where a noncustodial spouse claimed the
    exemption under a "qualified pre-'85 instrument," see
    A-3815 ):

    (1) Where the custodial parent requires the child's
    exemption to qualify for the head-of-household filing
    status, that filing status will still be available if the
    exemption is released, 26 see A-1405.

    (2) Where the custodial parent requires the child's
    exemption to qualify as a married individual living apart
    from a spouse (treated as unmarried), that status will still
    be available if the exemption is released, 27 . see
    A-1613.

    (3) Where the custodial parent seeks to have the child
    treated as a qualifying child for purposes of the earned
    income credit, that status will still be available if the
    exemption is released. 28 (In this case, the status will be
    available for both parents.) See A-4210.

    (4) Where the custodial parent seeks to claim the child and
    dependent care credit for qualifying expenses incurred for
    the child, the credit will still be available if the
    exemption is released. For this credit, custody is
    required-not the exemption. 29 See A-4314.

    (5) Where the custodial parent seeks to claim the Hope
    scholarship or Lifetime Learning credit for the child, these
    credits won't be available if the exemption is released.
    These credits are only available to the parent to whom the
    exemption is allowed. 30 See A-4511.

    (6) Where the custodial parent seeks to claim the child tax
    credit for the child, the credit won't be available if the
    exemption is released. This credit is only available to the
    parent to whom the exemption is allowed. 31 See A-4053.

    (7) Where the custodial parent seeks to qualify for the
    savings bond interest exclusion for qualifying higher
    education expenses incurred for the child, the exclusion
    won't be available if the exemption is released. This
    exclusion is only available to the parent to whom the
    exemption is allowed. 32 See J-3058.

    (8) Where the custodial parent seeks to claim a medical
    expense deduction for medical expenses incurred for the
    child, the deduction will still be available if the
    exemption is released. (Each parent can include medical
    costs incurred for the child in computing his or her medical
    expense deductions.) 33 See K-2302.

    26. Code Sec. 2(b)(1)(A)(i); Code Sec. 2(b)(1)(A)(i) before amend by
    Sec. 202(a), PL 108-311, 10/4/2004.
    27. Code Sec. 7703(b)(1); Code Sec. 7703(b)(1) before amend by Sec.
    207(26)(B), PL 108-311, 10/4/2004.
    28. Code Sec. 32(c)(3)(A); Code Sec. 32(c)(3)(B) before amend by Sec.
    205(a), PL 108-311, 10/4/2004.
    29. Code Sec. 21(e)(5); Code Sec. 21(e)(5) before amend by Sec.
    207(2)(A), PL 108-311, 10/4/2004.
    30. Code Sec. 25A(f)(1)(A)(iii) .
    31. Code Sec. 24(c)(1) Code Sec. 24(c)(1)(A) before amend by Sec.
    204(a), PL 108-311, 10/4/2004.
    32. Code Sec. 135(c)(2)(A)(iii) .
    33. Code Sec. 213(d)(5) .

    Document Title: A-3856 Impact of custodial parent's
    exemption release on other tax matters. Checkpoint Source:
    Analysis (FTC)

    Copyright 2006 RIA. All rights reserved.

    rooth

    << ======================================================= >>
    << The foregoing is intended for educational purposes only >>
    << and does NOT constitute legal OR professional advice. >>
    << >>
    << The Charter and the Guidelines for submitting >>
    << messages to this newsgroup are at www.asktax.org. >>
    << Copyright (2006) - All rights reserved. >>
    << ======================================================= >>
     
    rooth, Feb 24, 2006
    #5
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