My ex currently wants me to sign over tax exemption on our child as part of a custody settlement. Good idea?
Tuesday, May 4th, 2010 at
1:02 am
I have primary physical custody and have paid ALL of her uncovered medical and dental, food, clothing, educational, and housing needs for her whole life. Ex has paid very little voluntary child support and was only court-ordered to provide support recently. None of the other settlement points address educational fees or the K in back child support we are owed. I hate the idea of going to trial, but I am leery about signing over the tax exemption for all of the reasons listed above. Any advice?
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he wants you to let him get the government to pay his delinquent support
if your child lives in your household at least 184 nites of the year, you claim the child
you certainly provide a good deal more than the father who created the child and he is responsible for providing for his progeny
my advice? no do not do it
It’s your call. Depending on how much income you have, the exemption might or might not be worth much to you. Even if he gets the exemption, you still get the EIC if your income makes you eligible.
He was only court-ordered recently to pay child support and is already $11,000 behind? Maybe you need to go to trial and have the judge take a look at him.
Some people think it is only about a thousand bucks a year, why not keep the peace and just sign it over. That just isn’t the case!!!!
You miss the child tax credit for state AND Federal AND you do not get to write off child care expenses!!! This can be huge! Even after school care can be written off, as well as a slew of other things.
Your ex is trying to make a fast buck without ever earning it! They will get behind on their child support and child support recovery will seize their taxes, so you will get that thousand back, but you loose all the other things you could have deducted, AND you should be getting that thousand on your own by being the custodial parent AND also getting all the child support from the ex!
So in effect you would be giving away a thousand dollars plus to your ex for the privilege of having primary custody.
This doesn’t make any sense, and it is WORTH going to court over. Don’t give your ex a get out of jail free card, your child deserves to be supported.
It would not be applicable anyway.
IRS Deduction
Regardless of any custody agreement, or court order the IRS has it’s own definition of who the custodial parent is. Section 152(e)(4) defines custodial parent as the parent having custody for the greater portion of the calendar year and noncustodial parent as the parent who is not the custodial parent. If you feel that the mother may challenge this, or attempt to claim the child as well you can also double cover your back by having the Mom fill out form 8332, which basically says "I am the custodial parent of this child, and I am giving up my rights to claim the child this year. It can be found at http://www.irs.gov/pub/irs-pdf/f8332.pdf
The IRS rule is that if you have the child for more than half of the year, and they literally mean 183 days, you are the custodial parent.
Time spent in Day Care and/or School is deducted from the total.
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Do not sign away your rights. You support the child you get the deduction.
Why would you give him even more money to get back on his taxes?
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If you pay over half it is your deduction not hers. Do not do this! + she owes back Support no way she can get this!
Run a dummy return and see if not claiming the exemption has any impact on your tax liability or refund. If your income is relatively low, losing the exemption may not impact you at all. You still retain the ability to file as Head of Household, claim the EIC, claim the Child & Dependent Care Credit, etc. even if you give up the exemption.
If it does affect your tax position, try to use it as a bargaining chip to get back more than it costs you, such as increased child support.
If it goes to trial, more often that not the judge will order that you switch off claiming the child each year. You may wish to counter with that offer if he’s being rigid on any concessions in exchange for claiming the child every year.
It depends on what you get for the trade, and what it is worth to you. The child will only be a tax deduction until age 18, so you need to figure out how many years this will last for, and what it is worth to you. That involves understanding your tax bracket.
Generally, an extra exemption and deduction are worth about $1,800 for most people in a 20% tax bracket. It can be worth more if you are lower income and can qualify for a child tax credit. In that case, being able to claim her might be worth as much as $3,800 a year.
Talk with a tax advisor and see what the change will cost you, and then decide what to do from there. If you can’t afford that, then simply redo your tax return without the child and see what the additional tax is for you.
From the few details you put here, I would deny the request. Once you sign it away, you can’t get it back unless your ex consents to give it back, which it doesn’t sound likely.