Split up Parents issue, Paying Childcare and claiming

[TwinKristi]

You are not required to agree to the parent's request. You can accept separate payments or not. In the end, it's not your business as to which parent is entitled to claim the child care tax credit. The IRS law says that only one parent can claim the credit. That parent must be able to claim the child as a dependent. The child can only be a dependent if she lives with the parent for more than half the year and the parent provides more than half of her living expenses. So, even if you agree with the father, it won't help him. I don't think it's worth trying to argue with him about this. You should decide whether you want to do what they request.

I think you just posted about this a few weeks ago too and I changed a policy over it actually! I had a mom and Nana both paying me for different days but only mom can claim it and she's who I contracted with so she gets all the receipts for care, not some to mom and some to Nana.

[TwinKristi]

This is great Tom. Thanks for the info. Now what about when parents have their children 50/5? Do neither claim the child and the child care tax credits in that situation since they both have the child 50% of the time and not more?

I know you asked Tom but I believe this depends on the agreement made by the parents during their divorce or just what they mutually agreed on. They typically would alternate claiming the child and the expenses.

Eta- even if they put those expenses on their taxes it doesn't mean they're doing what they're supposed to be by law. I've heard of people using daycare expenses on one child for another child. If they're audited this would be discovered but if no audit, no one knows who the expenses are for.

[Blackcat31]

This is great Tom. Thanks for the info. Now what about when parents have their children 50/5? Do neither claim the child and the child care tax credits in that situation since they both have the child 50% of the time and not more?

I found this on a tax site where someone asked the same question. The questions were being answered by a tax professional. Maybe this will help answer your question.

"When there is no signed document by the "custodial parent"---then the IRS recognizes the custodial parents claim to dependency. However, most parents state that they have "joint custody" or "50/50 custody". In reality, usually one parent has the child(ren) longer that the other, especially since each year has 365 days, (except for last year---366). The IRS recognizes overnights as a tool for counting time spent with each parent.

If there is a true situation that each parent had the child for exactly 183 days during the year, and the parents were separate for the entire year, then the child would not be considered a "qualifying child" of either parent, and could only be a qualified relative. In this case, whoever paid more than 50% of the child's support would be able to claim the child.

If the situation is that the parents were together for part of the year, and the child alternated between them for part of the year split up, and was with each parent exactly the same # XXXXX days, (For example 240 days with one parent, 240 days with the other parent---because of shared time for part of the year) then there is a tie-breaker situation and whoever had the highest adjusted gross income would be allowed to claim the child.

There is a very convoluted set of rules for this type of situation. You can read m ore about types of dependency, rules for children of divorced or separated parents, and tie-breaker situations in Publication 501, found at www.irs.gov. If you need additional clarification, please let me know."

[TomCopeland]

child care tax credit

This is great Tom. Thanks for the info. Now what about when parents have their children 50/5? Do neither claim the child and the child care tax credits in that situation since they both have the child 50% of the time and not more?

Since the parent claiming the child care credit has to have paid more than 50% of the support for the child and have the child live with them more than 50% of the year, neither parent could claim the credit if the child lived with each parent for half the year.

[daycare]

TOm thank you so much for clearing this up for me. I have copied what you wrote and will pass the information on to the father.

Now that I know I am not legally obligated to have to do this, I am going to tell them I will continue to do things the way they are now One parent only.

[rebekki78]

Speaking from experience don't allow them to pay separate. Too many issues arise and then you end up without getting paid, wanting to term and mom arguing you can't term and it's not her fault dad didn't pay and she's paid all along etc.... Their breakup should not equal your problem.

I agree, from experience. One parent pays. If they each pay half, one parent pays the other parent their half. Don't fight that battle, not worth it.