Claiming a minor child
How to split the tax benefits.
Couples get divorce and then there is a question who is claiming a minor child on the tax return. A divorce agreement isn’t enough for the IRS, there is other rules, conditions and forms that need to be fill out.
Tax Benefits of claiming a minor child on a tax return:
- Head of Household Filing Status
- Earned Income Credit
- Child & Dependent care tax credit
- Dependency Exemption
- Child Tax Credit
Parent with which child resides most of the time is custodial parent, and another one is noncustodial. Usually custodial parent claims all the benefits if eligible, unless he or she signs form 8332 then benefits are getting split between two parents. Custodial parent still able to claim Head of Household Status, Earned income credit and child & dependent care credit (if eligible) and noncustodial parents claims dependency exemption and child tax credit (if eligible).
Parents need to understand that it does not matter if noncustodial parent pays child support or other household expenses for the child; tax law gives priority to the parent who resides with the child for most of the year, and not necessary fully supports the child.
Noncustodial parent needs to receive sign form 8332 from custodial parent and attached it to the tax return, if he or she is claiming tax benefits.
Contact VK Consulting LLC at 818-455-2630 if you need help filing your tax return or any other forms.