Mom and Dad are divorced. Dad gets son's exemption for 2008. I understand that Dad has filed already claiming son lives with him all year (he doesn't). If Mom files and claims son for EIC and child care credit, will an efile go in, or does it have to be paper filed? Can Mom take child care expenses and not EIC on son? I know there is a special rule for child care when exemptions switch from year to year. It's a sticky situation and eveyone is mad. I did not do Dad's, just trying to do Mom's. Any guidance?
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My experience...
has been pretty much to ignore what Mom (in this case) thinks Dad did, and prepare her return properly. Most often, Mom (in this case) doesn't understand whether Dad claimed dependency and/or EIC -- just "knows" that Dad claimed the kids for something -- and that when I e-file the return it sails right through. If the e-file gets rejected, worry about it then -- perhaps paper file at that point.
Remember, Dad could claim the kid's dependency exemption and Mom could claim the kids for EIC. (I don't recall how child care credit fits in there -- I thought that went with the dependency exemption, but I could easily be wrong.)
Bill -
I agree with Bill. Efile will catch Social Security numbers and dependency exemptions only, so the efile should go through for EIC. If the child could have been claimed as a dependent but Mom is allowing noncustodial parent to claim the dependent she can take the child care credit, assuming it is qualifying child care of course.Comment
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Child care credit goes to custodial parent only. I agree to try and efile. If father did claim child as living with him it will get rejected. Paper file and sometime later in the year both parents will get a notice to review their returns because two people have claimed same dependent. I have had this happen a couple times. The funny thing is it doesn't seem the IRS furthers this much past asking them to amend if they claimed exemption they should not have. No wonder they have such a big tax gap.Comment
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Efile Rejection
I have had a rejection, where separated parents are both trying to claim the child and have submitted to efile.
You can try to efile, if you receive a rejection on efile, that means the other parent's return has already been accepted, and you will have to paper file your t/p
Then in about 6-12 months the letters will be received by both parties stating that the child has been claimed on more than one t/p's return.
Good Luck,
SandyComment
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There is a rejection code for child already used for EIC, it's a code 506. You get a code 507 if it rejects for the exemption being claimed.
You can't split dependent care credit from EIC, so if the father did claim the child for EIC and the mother claims the child for dependent care credit she's going to get a letter.
I'd hate to be the one explaining that to the IRS.
Just do it right, claim the benefits she's allowed. If it rejects paper file.Comment
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Sorry I took off and didn't get back until this afternoon. My client wants to efile, not wait for her refund by paper filing. She deserves the EIC and child care credit even though she has released the exemption to the father. She did not sign a 8332. father is going by what it says in the custody agreement. Custodial issues go to the mother, but this is the second time this year that a custodial client has told me that their ex, the non custodial parent (probably won't be the last), goes on online to prepare taxes and efile, but when the child is put in that he doesn't live with the TP over 50% of the time, it won't let the efile go through. That is correct, it needs to be paper filed. But when they change the box to lives with more than 50% of the time, all of a sudden they can efile, and if it works, it must be right!? I think too much, worry too much over some details and then hear these stories. Why aren't self prepared taxes looked at more closely. Some people put in whatever works and whatever gets them the biggest refund. Sorry about the venting.
Back to a question: If we take all we are entitled to, should I just efile and see if there is a reject, and then suggest to her paper filing. She is about to the point just to file without taking anything for the child. This will cost her possibly $2000. What's my responsibility?Comment
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Definitely try to e-file first to see if there's a rejection. After all it's possible the father made too much money to qualify for EIC or something and it'll go through fine.
If it does reject... Well that's now up to you. You could efile without the child and then preparer an amended return. Seems to me there's something about preparing a return you know to be incorrect that could be penalized but at the same time I don't imagine this is the situation they're thinking of.
What the IRS should do is just get rid of codes 506 and 507. Since it needs to get resolved by them eventually anyway, just accept the return whether or not the child has already been used and issue IRS letters to the parties involved automatically.Comment
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