joint custody and claiming dependant tax deduction

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Latest post 12-03-2012 2:42 PM by Jrvikngfan. 16 replies.
  • 11-29-2012 4:18 PM

    joint custody and claiming dependant tax deduction

    I am hoping someone can help me with this question.  We have had a difficult time with my husband's ex-wife for years, but have always tried to take the high ground and suffer in silence for the benefit of our daughter, but it is starting to reach a point where we just can't take it any longer and want some advice on how to proceed.

    My husband's ex left him about 12 years ago as she was having an affair with her boss.  Once the divorce was complete, that relationship fell apart... I met my husband about 5 months before the divorce was final.  Our daughter (my step daughter) is now 13 but has no recollection of my husband and her mother together.  She does not know why they split... and we would certainly never want to share that with her.  Her mother has not made anything easy regarding day to day issues but this eased some when she remarried several years ago... probably because she had someone new to deal with.  We have compromised on everything, have bended to her will on most any issue... no matter how big or small.  When she has had issues with her husband's ex wife and step daughter custody/visitation issues... we have worked around them to help accomodate. 

    Now, background behind us... about 1 yr to 1 1/2 yrs ago we cut our visitation down to one day during the week and every other weekend as our daughter said it was easier for her homework/school.  We have always had joint physical and legal custody.  We have always alternated years on claiming her on our taxes... We didn't want to give up a day, but wanted her to be happy and less stressed and since her mom (who only lives 20minutes from our home, door to door) lives in her school district and we moved outside of it about 5 years ago. 

    The question: her mom called this morning to state that this extra 40 some days a year she has her entitles her to claim her as a dependant and plans to do so until she is 18.  Its kind of the straw that broke the camel's back... we have 2 of her half siblings here and want to see her more, but accomodated her wish to be able to spend more time at her mom's house since it was easier for school.  Is it legal what she is requesting?  This year is our turn to claim her on our taxes... and it may seem trivial, but our other children are adopted and the cost of adopting them has liquidated our savings... we really need to watch every penny.  Plus, her college 529 plan is funded, and we need to use that money to start working on ones for the other two. 

    Can we adjust our schedule to continue with one day during the week and every other weekend during the school year and go back to 2 days duing the week during the summer months and avoid being told "she is the primary custodian".  We don't want to force our daughter to come here and cause more stress... but, after giving on everything for so many years, we don't want to agree to this. 

    Please help!

     

  • 11-29-2012 4:45 PM In reply to

    • DPH
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    Re: joint custody and claiming dependant tax deduction

    Jrvikngfan:
    about 1 yr to 1 1/2 yrs ago we cut our visitation down to one day during the week and every other weekend as our daughter said it was easier for her homework/school.

    Was this change "blessed" by the court and the original visitation order changed?  If not and the original is still in place, tell daughter she needs to revert back to the original visitation and to get over the stress.  If it was changed by the court, then you need to discuss with your attorney what course of action would be best.

    Was the every other year tax thing court ordered or an informal agreement?

     

     

    "Never argue with stupid people, they will drag you down to their level and then beat you with experience."  -  Mark Twain

     

  • 11-29-2012 6:27 PM In reply to

    • Kivi
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    Re: joint custody and claiming dependant tax deduction

    As noted, a few more details are needed.

    What does the current custody and visitation agreement say about who gets to claim the dependency deduction if anything. The agreement is not binding on the IRS, but if the agreement says every other year and this is your year, you can haul her into family court on contempt of court charges if she will not sign the required IRS form. (I will have to look up the form number.) Otherwise, she has to petition the court for a change in who gets to claim the dependency deduction.

    If there is nothing in writing on this issue in the court orders, then the parent who has physical custody the majority of the year gets the dependency deduction insofar as the IRS is concerned.

    If you don't know what the courts orders actually say, now would be an excellent time to dig them out and review them. Don't rely on what you think they say. Look them over.

     

  • 11-29-2012 6:33 PM In reply to

    • Kivi
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    Re: joint custody and claiming dependant tax deduction

    BTW, the IRS form is IRS form 8832.

  • 11-29-2012 10:51 PM In reply to

    Re: joint custody and claiming dependant tax deduction

    thanks for the advice. 

    We will pull out the original paperwork.  I think she is counting on the fact she had her for about 40 more days last year since we voluntarily (informal change to accomodate our daughter) allowed her to stay at her mom's for the majority of the school week and just come to our house on Wednesdays since it made keeping up with her studies easier (not having to pack everything she is working on for a school project and take with her from house to house).  If we have her our old schedule during the summer... I think it only gives her a little over 30 extra days per year... is that enough to demand to have more physical custody and claim her on her taxes?

    I feel like we lost out (what basically accounts for one day every other week we gave up) time with her and now are doubly punished by demanding we sacrifice claiming her on our taxes... tired of people who don't care about anything but themselves always ending up on top!

  • 11-29-2012 11:01 PM In reply to

    • Drew
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    Re: joint custody and claiming dependant tax deduction

    You lost out by not paying attention to the rules --the IRS is pretty sticky and if Mom has kid majority of nights then that's it UNLESS the order says otherwise and that IRS form is used or the order has all the right words in it --but the gold standard is the IRS form to assign the deduction to other parent. 

    If the prior status quo was to alternate you may have a decent equitable point to get court to modify the order to make it alternate --but you need it in the order OR 51% of the countable nights in that year.

    She is not doing anything worg--if you miss it by 10 days or 40 days the IRC is clear --if you want a better future result--ask that court change the order.

    As an aside you need not give up a single day to Mom --but winning that point won't change the outcome with IRS and seem a bit rotten to make kids suffer for squabbles of parents.



  • 11-30-2012 1:05 AM In reply to

    Re: joint custody and claiming dependant tax deduction

    Assuming the child is under age 19 on December 31, is not married, is a U.S. citizen or resident (or resident of Mexico or Canada), and the child has not provided over half her total support, then the parent that may claim the dependent exemption for the child is the parent with whom the child lived for the greater part of the year (i.e. the parent who had her for 183+ nights of the year). That parent is the custodial parent for federal tax purposes. There is only one exception that would permit the noncustodial parent to claim the dependent exemption, and that is if the custodial parent executes a waiver agreeing not to claim the exemption and releasing the exemption to the other parent. IRS Form 8332 may be used for the waiver. The waiver must be attached to the noncustodial parent's tax return. IRS publication 501 discusses these rules in detail.

    The tax law is very clear that a court order granting the exemption to the noncustodial parent is NOT acceptable as a waiver. The Form 8332 or other separate waiver executed by the custodial parent MUST be obtained. What the court order does, however, is give the noncustodial parent a remedy in the court that issued the decree to enforce the order if the custodial parent won't cough up the waiver.

    So the key is to first read the order and see what it says about this issue. If your husband is entitled to it under ther order, he can point that out to her and tell her he'll go for contempt if she won't provide the waiver. Bear in mind, though, the she may at the same time seek to modify the order to give her the exemption going forward citing the changed circumstances.

  • 11-30-2012 1:34 AM In reply to

    Re: joint custody and claiming dependant tax deduction

    Kivi:

    BTW, the IRS form is IRS form 8832.

    No, it is not. Form 8832 is used for making business entity classification elections. Form 8332 is the form used for the dependent exemption waiver.

  • 11-30-2012 8:30 AM In reply to

    • Drew
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    Re: joint custody and claiming dependant tax deduction

    As an aside you tecnically do not need a court order , if Mom executes the IRS form 8332 that works by itself . Now apparently Mom wants the deduction and meets the criteria of 183+ days to get it w/o further debate  --if there is something that you have that mom wants, well,  Dad is free to jawbone tit of tat and get the form signed?  May not be great odds but one can always try.

    As an aside I would NOT allow Mom to establish a new higher status quo of nights with child UNLESS its crystal clear under the relevant state law this does not invite giving her a window to seek more CS . Sorry but Dad may need to get tough about this ...



  • 11-30-2012 8:31 AM In reply to

    • Drew
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    Re: joint custody and claiming dependant tax deduction

    Correction--8832  --its a simple form available on line.



  • 11-30-2012 8:48 AM In reply to

    • Drew
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    Re: joint custody and claiming dependant tax deduction

    What do you mean by "her" 529 plan ?

    Does Dad own a plan on which she is the designated beneficiary  OR is this a UTMA / 529 which is her plan and Dad is merely the custodian --or what?

    This is a can of worms and the states are divided as to imposing a duty on parents in a divorce to provide for college   My state, PA has banned it since about 1995 and I think VA failed to allow it to be tacked on as an added duty  a couple of years ago --but you check as to emancipation from CS issues in VA. .

    And the aid logic embodied in the FAFSA rules is pretty clear--its the income /assets of the CP and any new spouse she may have that matters as to aid and not the NCP's situation. So if aid is to be an issue --you may need to take a fresh look at a different set of rules.  And some possible options to improve the child's aid picture.



  • 11-30-2012 10:02 AM In reply to

    Re: joint custody and claiming dependant tax deduction

    Drew:

    Correction--8832  --its a simple form available on line.

    You got it right the first time. Once again, the correct form is Form 8332, not 8832. 

  • 12-01-2012 11:56 AM In reply to

    Re: joint custody and claiming dependant tax deduction

    thank you for all of your advice.  It has been very helpful. 

    we would never want to create any more stress for our daughter; however, I would not put past her mother using this as a stepping stone to go back and file for full custody, child support, etc.  Currently, (for the last 11 years) we have paid all daycare, but otherwise everything has been divided evenly.  The 529 plan is fully funded, so not really an issue.  She has made a lot of things difficult: holidays, purchasing things or signing her up for things and then just demanding $ without checking with us... it just kills me that we have always chosen to work a little harder, deprive our other two from the same things our daughter has to avoid fighting with her... have listened when she cries about how difficult her new husband's ex is... change our plans to accomodate her... and now this informal agreement has been mandated to be her's this year and until she is 18. 

    I think we need to revert back to the old custody arrangement of 2 days per week and every other weekend (Fri, Sat, Sun) so it is dead even and go back to every other year for tax deductions.  She will still come out ahead this year (and claimed her last year).  But, I am worried she will make this the jumping off place for filing for full custody.

     

  • 12-01-2012 2:22 PM In reply to

    • Drew
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    Re: joint custody and claiming dependant tax deduction

    Pay super careful attention to the night count OR get the required form executed / w or w/o court order --the Form is Gold standard.

    The count can get tricky IF child has sleep overs at friends/relatives house or summer camps etc--pay keen attention to exact words.



  • 12-01-2012 2:25 PM In reply to

    • Drew
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    Re: joint custody and claiming dependant tax deduction

    Caution : If mom is aggressive-- do NOT rule out that she seeks to tap Dads 529 plan (if that is what it is) so as to avoid her moral duty to assist with college .



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