by Deborah Ritz
I share joint and physical custody of my child with my ex-wife. We have a custody agreement from family court which allows me to claim my child as a dependent every other year. The time our child spends in each of our homes is equal and we both provide one-half of our child’s support. What happens if we both file Head of Household and use the child as a dependent in the same year?
First, if you both file electronically, the one that files first will be accepted and the second filed return will be rejected because the dependent’s social security number will have already been used.
The rejected return can be converted into a paper return and filed by mail which will start a review of both returns.
Sometimes, a child meets the relationship, age, residency, support, and joint return tests to be a qualifying child of more than one person.
Although the child is a qualifying child of each of these persons, only one person can actually treat the child as a qualifying child to take all of the following tax benefits, provided the person is eligible for each benefit:
• The exemption for the child.
• The child tax credit.
• Head of household filing status.
• The credit for child and dependent care expenses.
• The exclusion from income for dependent care benefits.
• The earned income credit.
The other person cannot take any of these benefits based on this qualifying child. In other words, you and the other person cannot agree to divide these tax benefits between you.
If you and the other parent can’t agree on which of you will use the “qualifying child” on their return, the IRS has established “Tiebreaker Rules” to determine which person can treat the child as a qualifying child to claim these six tax benefits.
• If only one of the persons is the child’s parent, the child is treated as the qualifying child of the parent.
• If the parents do not file a joint return together but both parents claim the child as a qualifying child, the IRS will treat the child as the qualifying child of the parent with whom the child lived for the longer period of time during the year.
If the child lived with each parent for the same amount of time, the IRS will treat the child as the qualifying child of the parent who had the higher adjusted gross income (AGI) for the year.
• If no parent can claim the child as a qualifying child, the child is treated as the qualifying child of the person who had the highest AGI for the year.
• If a parent can claim the child as a qualifying child but no parent does claim the child, the child is treated as the qualifying child of the person who had the highest AGI for the year, but only if that person’s AGI is higher than the highest AGI of any of the child’s parents who can claim the child.
If the child’s parents file a joint return with each other, this rule can be applied by dividing the parents’ combined AGI equally between the parents.
Subject to these tiebreaker rules, you and the other parent may be able to choose which of you claims the child as a qualifying child.
See IRS Publication 501 or on line at: www.irs.gov/
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Questions for Deborah Ritz can be e-mailed to The Weekly Adirondack at WeeklyADK@yahoo.com