Divorced couple still reside in same Household

[Jesse]

Divorced couple w/ 4 kids still live in the same house because one of the children needs 24 hour care.

Divorce decree states alimony of $900 be paid to ex and child support of $1200. Is there any exception for the alimony to be deductible since they both live in same house?

I'm thinking not so onto second question - who is H of H?

Child support is considered paid by both parents and kids are w/ both parents for greater than 6 months.

Alimony can't be deducted so who's support is this?

Client pays $250 month rent plus upkeep costs to ex and house is in the ex's name.

Regardless of who is H of H the dependency/Child Tax credit/EIC would still follow the tie breaker rules unless the parents can decide, correct?

What else am I missing?

[Bees Knees]

Lets see.. they are such good parents, even though they hate each other’s guts so bad that they needed to get a divorce, they just had to continue living together for the kids.

Oh that’s soooo…..soooo…sweet…makes me want to cry….

No, on second thought….that’s a bunch of baloney!

They got a divorce thinking they could each qualify for EIC, or not bankrupt each other having to split up the house, or some other goof ball reason. Don’t give me any of this “for the kids” crap. People are sick…..What a bunch of screwed up priorities.

[taxea]

Divorced couple same household

Now that I have gotten up from the floor and composed myself after reading BeesKnees response, which I agree with...
Do the support worksheet including the alimony for the spouse as income and divide the child support among all four as the childrens incomes. Whichever provided the most support takes the kids. Didn't you say one party is responsible for paying the child support? That puts it in his/her column. Court rules. Or does the document divide it?
The alimony is income of the receiver, and a deduction of the payer.
Head of Household goes to the winner of the support test.

[Jesse]

One of their children was in a tragic accident and suffered extensive brain damage and 24 hour care. I do not know what the marriage circumstances were before this, but am told that they work opposite shifts so rarely see each other. I'm only getting one side of the story and because of conflict don't want to do both tax returns.

Now I'm just trying to sort out the mess to see what my client is entitled to. His income is $55,000. He says his ex's is approx $15,000. She benefits from EIC but he would benefit from CTC.

I want to file H of H but he says her preparer says she would be H of H because house is in her name.

[Bees Knees]

The children are qualifying children for both parents. So unless both try to claim the children, either one can claim them as dependents. They could also choose to split them up.

I also see no restriction on EIC in this case. The one with the income low enough to qualify could take it.

HOH requires the taxpayer to pay over 50% of the cost of keeping up a home. So only one parent can qualify for that.

Child Tax Credit is generally going to go to the parent that claimed the kid(s) as a dependent. The two exceptions to that rule don’t seem to apply here.

Now lets compare the situation had the parents remained married.

No EIC. Income too high, so getting a divorce was a better choice.

No HOH. Only MFJ or MFS, but one single + one HOH exceeds MFJ standard deduction by $2,300, so getting the divorce was a better choice.

Child tax credit – same benefit whether they are divorced or still married.

So from a tax standpoint, other parents could learn a lesson about the benefits of getting a divorce and just living together. You come out way ahead from a tax perspective.

Like I said before, our nation has screwed up priorities.

[Bees Knees]

Clarification

For EIC, the mom would have to also claim the child as a dependent, because th child cannot be a qualifying child of another taxpayer. So Dad should claim two kids, and mom should claim the other two.

[SueBaby]

Lets see.. they are such good parents, even though they hate each other’s guts so bad that they needed to get a divorce, they just had to continue living together for the kids.

Oh that’s soooo…..soooo…sweet…makes me want to cry….

No, on second thought….that’s a bunch of baloney!

They got a divorce thinking they could each qualify for EIC, or not bankrupt each other having to split up the house, or some other goof ball reason. Don’t give me any of this “for the kids” crap. People are sick…..What a bunch of screwed up priorities.

You are sooooo right about this. I worked for a lady for 6 years and she would do taxes for these people that SAID This year we are getting a divorce (which happens to be 3 years they done this.) They are all in it for the EIC. Of course they are NOT coming to me.