Can I claim half of my child daycare even if the other parent is claiming her?

Forum|Forum|7 years ago
May 31, 2019
3 replies
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Me and the mother split the daycare 50/50 but turbo tax isn't letting claim it becuz she doesn't qualify as a dependent

TurboTax Deluxe Online

Best answer by Hal_Al

No, unless the child lives with you. Only one parent may claim the child care credit and that parent is the custodial parent. It is not necessary that you be claiming the child as dependent, if you are the custodial parent. But that assumes you are separated from the other parent. If you and the other parent live together, than you do have to be the parent claiming the child as a dependent, to get the day care credit.

For tax purposes, there is no such thing as joint custody, regardless of what your legal agreement says. The requirement, to be custodial parent, is that the child live with you MORE than 50% of the time. One of you has to be the custodial parent and the other the non-custodial parent.
But, the custodial parent may count the money paid by the non-custodial parent in calculating the child care credit for herself. The general rule is that a taxpayer must actually make the payment (as well as be legally liable to pay it) to get the deduction. However, there is a recent tax court ruling that seems to say that you can take the deduction even if he was the one that actually paid it under the theory that his paying the expense is just another form of child support and it was your money that paid for it.

There is a special rule in the case of divorced & separated (including never married) parents. When the non-custodial parent is claiming the child as a dependent/exemption/child tax credit; the custodial parent is still allowed to claim the same child for Earned Income Credit, Head of Household filing status, and day care credit. This "splitting of the child" is not available to parents who lived together at any time during the last 6 months of the year; then only one of you can claim the child for any tax reasons. The tax benefits may not be split in any other manner.

Note in particular that the non-custodial parent can never claim the Earned Income Credit, Head of Household filing status or the day care credit, based on that child , even when the custodial parent has released the exemption to him.

But, the custodial parent may claim the amounts paid by both parents in calculating the dependent care credit.the

Hal_AlAnswer

Employee

No, unless the child lives with you. Only one parent may claim the child care credit and that parent is the custodial parent. It is not necessary that you be claiming the child as dependent, if you are the custodial parent. But that assumes you are separated from the other parent. If you and the other parent live together, than you do have to be the parent claiming the child as a dependent, to get the day care credit.

For tax purposes, there is no such thing as joint custody, regardless of what your legal agreement says. The requirement, to be custodial parent, is that the child live with you MORE than 50% of the time. One of you has to be the custodial parent and the other the non-custodial parent.
But, the custodial parent may count the money paid by the non-custodial parent in calculating the child care credit for herself. The general rule is that a taxpayer must actually make the payment (as well as be legally liable to pay it) to get the deduction. However, there is a recent tax court ruling that seems to say that you can take the deduction even if he was the one that actually paid it under the theory that his paying the expense is just another form of child support and it was your money that paid for it.

There is a special rule in the case of divorced & separated (including never married) parents. When the non-custodial parent is claiming the child as a dependent/exemption/child tax credit; the custodial parent is still allowed to claim the same child for Earned Income Credit, Head of Household filing status, and day care credit. This "splitting of the child" is not available to parents who lived together at any time during the last 6 months of the year; then only one of you can claim the child for any tax reasons. The tax benefits may not be split in any other manner.

Note in particular that the non-custodial parent can never claim the Earned Income Credit, Head of Household filing status or the day care credit, based on that child , even when the custodial parent has released the exemption to him.

But, the custodial parent may claim the amounts paid by both parents in calculating the dependent care credit.the

C

cwade1211

Employee

What if divorced parents split physical custody of the child 50/50? When 1 parent claims irs dependency of the child, can the other parent claim 50% of the child care expenses, which they actually do pay?

M

MargaretL1

Employee

Hello,

You cannot claim Child and Dependent care credit if the child is not your dependent. The child must be your dependent in order for you to claim this credit.

Please click here here for more details.

I hope you have found this information helpful.

Hal_Al

Employee

See above, for an exception.

K

Kbenoit

Hi @Hal_Al

It looks like the case link you shared is no longer working and I’ve spent several hours trying to find the case(s) you are referring to where a former spouse paying for daycare was deemed another form of child support and therefore claimable by the spouse receiving the benefit for the dependent care credit. I even culled through the US Tax Court’s online opinion search and couldn’t find it. Could you share a link or point me to an online resource for this?

Thanks in Advance

LeonardS

Do you qualify for the child care tax credit? If your only source of income was child support that is not earned income.

You must have earned income to qualify for child care tax credit.
You must have paid for the care so that you could work or look for work. Being a full-time student or a parent unable to care for themself does count as "working" for the purposes of the credit.

Ref: Publication 503 Publication 503 explains the tests you must meet to claim the credit for child and dependent care expenses.

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K

Kbenoit

@LeonardS

Thank you for your reply. I am familiar with the standard tests for who is able to claim the credit. My question specifically has to do with the situation when one spouse is paying for childcare in lieu of paying child support. Could the former spouse who would otherwise be receiving child support, if they are the custodial parent and meet the working status stipulations, claim the dependent care credit?

The rationale being that if the child support payments went to the custodial parent directly, the custodial parent would in turn then be using those payments for child care, therefore this really should be the custodial parent's credit to claim even if they did not make the child care payments directly.