Need Confirmation

[Gary]

I know the answer to this question but just want all you experts to confirm. I have two clients that have lived together for several years but are not married and have a child. The man makes much more than the woman.The tiebraker for dependency and EITC says the man can give the dependency to the woman, who will also receive EITC. Of course both will file as single. Please tell me this is correct. (Is this an excuse for not getting Married?)

[DexEA]

You can not split the credits and the since the child resides with both parents the Mom can't give Dad the exemption.

Dad can go HoH, (assuming he pays more than 1/2 the cost of keeping up the home), take child's dependency exemption, Child Tax credit, Child care credit,(if any), and EIC, which sounds like will be zero. Mom then is single, nothing for the child.

If Dad paid 1/2 the cost of keeping up the home, Mom would be single, but can take child's dependency exemption, Child Tax credit, Child care credit,(if paid), and EIC. Dad is then single, nothing for the child.

[Gary2]

I know the answer to this question but just want all you experts to confirm. I have two clients that have lived together for several years but are not married and have a child. The man makes much more than the woman.The tiebraker for dependency and EITC says the man can give the dependency to the woman, who will also receive EITC. Of course both will file as single. Please tell me this is correct. (Is this an excuse for not getting Married?)

It is correct, except I wouldn't use the phrase "give". The two can decide which one of them will claim the child, and that person will get all of the benefits associated with claiming the child for which that person can qualify - which may or may not include HoH.

As for being an excuse for not getting married? It's certainly a short-term financial advantage to not getting married in this situation, but whether it's an excuse should be asked of a marriage counselor.

[taxea]

You can not split the credits and the since the child resides with both parents the Mom can't give Dad the exemption.

Dad can go HoH, (assuming he pays more than 1/2 the cost of keeping up the home), take child's dependency exemption, Child Tax credit, Child care credit,(if any), and EIC, which sounds like will be zero. Mom then is single, nothing for the child.

If Dad paid 1/2 the cost of keeping up the home, Mom would be single, but can take child's dependency exemption, Child Tax credit, Child care credit,(if paid), and EIC. Dad is then single, nothing for the child.

More simply put:
If Dad claims the dependent and HOH he wins the tie for all the other credits. If Mom takes the kid neither cannot claim HOH and mom takes all the credits although if child care is involved and Dad paid it there is another issue.

Does this couple pool there funds? Does she pay any of the household expenses? Do they rent or own? If they own, does she pay any part of the mortgage, etc. You might want to do a support sheet to determine how much each is paying. She may make less but if the agreement is that everything is 50/50 how would you prove either paid more?

[New York Enrolled Agent]

I know the answer to this question but just want all you experts to confirm. I have two clients that have lived together for several years but are not married and have a child. The man makes much more than the woman.The tiebraker for dependency and EITC says the man can give the dependency to the woman, who will also receive EITC. Of course both will file as single. Please tell me this is correct. (Is this an excuse for not getting Married?)

Gary

Based on your post, this child is a Qualifying Child of either parent (I presume all the tests for QC are satisfied). There is no tiebreaker rule unless the child is claimed by both parents - in that case the tiebreaker rule would give the Qualifying Child to the parent with the higher AGI which appears to be the father. Since the child is a QC of each of them, either one may claim the child and all tax benefits will stay with that parent. I agree with your later post and your rejection of the word "give".

[Kram BergGold]

TTB page 3-16

See page 16 of chapter 3, the next to last example on that page.

[arlo]

Same with me

I have three families with children that file this way (not married but living with each other). They look first at which gets the most tax refund then file. One files HOH the Other single. HOH gets all credits.
They have the best of both worlds.

[Super Mom]

Yep, that's what I'd do too. One will be HOH with all the credits and the other single.

[Gary]

Thanks

Thank you all for easing my mind.

[taxea]

I have three families with children that file this way (not married but living with each other). They look first at which gets the most tax refund then file. One files HOH the Other single. HOH gets all credits.
They have the best of both worlds.

I trust they abide by the rules first. I hate to think they would base it solely on who gets the most refund. Whatever is done have the mother sign a waiver F8332 if the father is taking the dependent, simply because when the parents are not married the custodial parent is more frequently the mother gets first dibs on the kid in cases.

[KBTS]

I trust they abide by the rules first. I hate to think they would base it solely on who gets the most refund. Whatever is done have the mother sign a waiver F8332 if the father is taking the dependent, simply because when the parents are not married the custodial parent is more frequently the mother gets first dibs on the kid in cases.

The 8332 is only used for a custodial parent to release the dependency exemption to the non-custodial parent. It is not used in a situation like what is described here (unmarried parents living together).

[taxea]

There is nothing that prohibits it and I would rather have the 8332 in my client file incase it is questioned.

[Gary]

8332

This form is for divorced/separated people.

[DexEA]

As overtired as I am......

this just doesn't make any sense,

I trust they abide by the rules first. I hate to think they would base it solely on who gets the most refund. Whatever is done have the mother sign a waiver F8332 if the father is taking the dependent, simply because when the parents are not married the custodial parent is more frequently the mother gets first dibs on the kid in cases.

There is nothing that prohibits it and I would rather have the 8332 in my client file incase it is questioned.

If the parents live together with the child there is no singular custodial parent - Mom and Dad are both custodial parents. The F8332 can't be used because there is not a noncustodial parent. If you are implying that the F8332 can be used than would you also give the custodial parent that is implied to be the noncustodial parent the child tax credit too?

What prohibits the F8332 from being used is the fact that there is no noncustodial parent for the custodial parent to give the exemption to.

[taxea]

this just doesn't make any sense,





If the parents live together with the child there is no singular custodial parent - Mom and Dad are both custodial parents. The F8332 can't be used because there is not a noncustodial parent. If you are implying that the F8332 can be used than would you also give the custodial parent that is implied to be the noncustodial parent the child tax credit too?

What prohibits the F8332 from being used is the fact that there is no noncustodial parent for the custodial parent to give the exemption to.

Do you have a cite that "prohibits" it? I don't mean to be "sticky" but you never know with parents, what is going to happen in the future and this gives dad the proof he needs when he needs it. Or how about if they are sharing the residence and that's all! A woman scorned.
I would give the credits to the person that takes the dependent.