HOH "shared custody"

[nalawson]

I have a new client that has two children that live with her. The divorce decree says she and her ex have "shared custody". They each claim a child each year.. She is the custodial parent and would like to claim both the children since they live with her all the time. The children both qualify as her dependents. Ex sees the chidren rarely. My understanding is that the custodial parent has the right to claim the children and if they want to give up that right they have the option with the form 8832 given to the non custodial parent. Is their something about the term "shared custody" and opposed to "joint custody" that I need to know about?

[MAJ]

HOH Shared Custody..

If the divorce decree states he/she has the right to claim and she/he agreed to those terms then you have to be careful. Obviously, only one can claim HOH. From what I see the norm is to alternate every other year.
If you can get the spouse to sign off... Then you're golden.. that's usually rough though.. As soon as you ask them they think they're loosing something... And if they are under 17 they are -- $1,000 plus x% of the $3,500 deduction.

[Jesse]

Custody is determined by physical presence in the house. They can share custody, however the person that has the child for the longer period thru-out the year is the custodial parent.

The IRS rules and the divorce decree often times do not agree. Per the IRS she may have the right to claim the children. If she does not abide by the divorce decree however, it could be contempt of court and the ex may be able to take action.

As custodial parent she may still qualify for EIC and Head of household.

[nalawson]

I wasn't thinking about the contempt of court part. Thanks.

[Koss]

EIC, HoH, CTC and Dependency

Under the federal tax law, the custodial parent, by definition, is that parent with whom the child lived for more than half the year. The divorce decree cannot change or override the federal tax law.

The divorce decree, or an agreement between the parents, can allocate the dependent exemption and the child tax credit to the noncustodial parent.

EIC and HoH can never be claimed by the noncustodial parent. The tax law says that these benefits are available only to the parent with whom the child lived for more than half the year.

Your client will not be held in contempt of court for claiming EIC for both children, if she meets all the criteria established by the tax code.

For HoH, she only needs one kid.

If the divorce decree specifies that the ex gets the dependent exemption for one of the kids, then she should respect that and give the ex a Form 8332 so he can claim that child. But that doesn't allow him to claim the child for EIC or HoH.

I doubt that the divorce decree explicitly refers to EIC or filing status. But even if a divorce decree DID state that a person could claim HoH or EIC, it won't hold up if the child wasn't actually living with them for more than half the year.

Contempt of court? Yes, that's possible with respect to the dependent exemption and the child tax credit. But not for EIC or HoH. Even if the divorce decree supposedly authorized EIC or HoH for one parent, if that parent fails to meet the criteria, then the court order is void. A state court cannot issue an order that violates federal law. Any contempt citation would be struck down on appeal. But if the client was summoned to appear on a contempt hearing, the judge probably would not find her in contempt if her lawyer properly educated the judge on the federal tax law.

BMK

[nalawson]

Thanks KOSS for making sense of it all for me. Sometimes there are so many scenarios with children of divorced parents, that I don't think it all the way through. My client will be happy about the additional child for EIC purposes. I am printing out your response and keeping it on my desk!