taxguy057 Posted September 20, 2012 Report Share Posted September 20, 2012 I have a client who is divorced and has joint custody of her daughter with ex husband. They both split the expense for their daughter's daycare. Through the divorce decree each will claim her (the daughter) every other tax season. Is there a way that the year the child is not the dependent on the parent's tax return they can still file and claim the half of the daycare expense paid that year? Reason I'm asking is because I filed the return for my client who does not get to claim the dependency this year but paid half the daycare and it was rejected so just seeing if there is a loophole to allow the credit...her half was over 4000.00 so she's kinda pissed!! lol! Thx for your help!! TG Quote Link to comment Share on other sites More sharing options...
Lion EA Posted September 20, 2012 Report Share Posted September 20, 2012 The childcare credit stays with the custodial parent even when he/she signs 8332 to give the dependency to the non-custodial parent. Quote Link to comment Share on other sites More sharing options...
taxguy057 Posted September 20, 2012 Author Report Share Posted September 20, 2012 oh poo!! Thx!! :P Quote Link to comment Share on other sites More sharing options...
Lion EA Posted September 20, 2012 Report Share Posted September 20, 2012 I understand that sentiment. I drove my stepdaughter to before-school daycare on my way to work; my husband paid for his daughter's daycare. But, we couldn't take a deduction! Quote Link to comment Share on other sites More sharing options...
jainen Posted September 21, 2012 Report Share Posted September 21, 2012 >>Through the divorce decree each will claim her (the daughter) every other tax season<< Sorry, that is no longer allowed. According to Pub 501, "The noncustodial parent cannot attach pages from the decree or agreement instead of Form 8332 if the decree or agreement went into effect after 2008." Doesn't matter what the decree says or what the judge ordered about "joint" custody. How many nights did the child spend with each parent? If less than 183 your client can NEVER claim the child except with a signed Form 8332. She may need to talk to her lawyer if the decree does not require the other parent to sign that form. Quote Link to comment Share on other sites More sharing options...
SaraEA Posted September 21, 2012 Report Share Posted September 21, 2012 I think the key to answering this question is what does "joint custody" mean? If the child actually lives with each parent roughly half the time, then it's fine for each parent to claim the exemption and child care credit every other year. As long as both parents don't claim the child and care expenses at the same time, the IRS isn't going to go demanding signed 8332s. What your client is trying to do is get around the $3k limit on child care expenses on which the credit is based. If both parents claimed $3k for the same child, they'd effectively be raising the limit to $6k (which still isn't enough for quality care, but congress has been reluctant to adjust this amount for inflation). If the child actually lives with one parent more than with the other, then only that parent can claim child care. Think about it. If your child doesn't live with you, you really don't need child care. You can go to work (or school, or look for work) as you please without having to think about what you're going to do with the kid while you're away. In this case only one parent qualifies as the custodial parent and is entitled to child care expenses, even though it's the other parent's turn to claim the dependent. F8332 will be required. Quote Link to comment Share on other sites More sharing options...
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