Who gets the insurance?

[Snaggletooth]

Divorced couple. Here we go again...

Father is self-employed and unable to find insurance. Mother is employed by an employer who provides insurance but the mother has a $174 of the premium deducted from her paycheck monthly. The $174 is entirely for children, as her company absorbs all of the insurance for its employees but charges for dependent coverage.

Father pays child support but writes a separate check for $174 paid to mother to reimburse her for the insurance.

If all other conditions are met (dependency, 10%, etc.), does the father get to claim this $174 as a medical deduction on Schedule A?? Please restrict the thought process to only the question presented and assume all other conditions are met. No s.125 deduction for mother, no failure to meet 10%, children are dependents of father, etc....

[Koss]

Medical Expense

The divorced father could arguably claim a medical expense deduction on Schedule A for that portion of the monthly insurance premium that is associated with coverage for the dependent child. But I don't see how he could take a deduction for any portion of the premium that is for coverage of his ex-wife.

Even if the entire $174 per month is for coverage for the child...

Interesting theoretical question...

But does it really matter? Will he exceed the 10% AGI threshold?

And, ummm... wait a minute, here...

Is the money coming out of the mother's paycheck pre-tax?

I suppose you could still craft an argument that it's not pre-tax for him.

BMK

[Snaggletooth]

Restate Original Post

I have [again] failed to give all relevant facts, leading Burton into a non-answer. I've edited the original post so that it is definitive enough to present the facts. Sorry.

[DonB]

As long as the payment is in addition to required child support, I would want a written agreement from the mother that the $174 was used for medical insurance, and then I would take it.

[Burke]

I had somewhat the same situation in a divorce case. Husband paid his ex-wife's medical insurance as specified in the separation/divorce decree, and he deducted that as alimony. Was it specified that your client pay that expense in theirs? If not, it may be considered just additional child support. But if he is claiming the dependent(s), it is allowed that he deduct the medical. So its a gut call, IMO.

[FEDUKE404]

How about another twist?

Divorce decree states husband/wife swap exemption for child each year. Child lives with mom greater amount of time, and Form 8332 is easily procured to resolve exemption question.

Divorce decree also states that husband pays allowable dependent care expenses....every year.

1) Can H claim any? Or have an employer DCA for same? Hint: NO qualifying child for him.

2) Can W claim any? Hint: She may have all kinds of "receipts", maybe even a DCA, but she is effectively reimbursed by H.

I think you could make a fairly good case that any tax benefit (for H and W) for payment of dependent care expenses vanishes.

Shakespeare was definitely correct about those lawyers!!

FE

[Snaggletooth]

Thanks Guys

1) Can H claim any?

But no to the childcare. Childcare credit cannot be taken by a parent if the child does not live with him(her).

[FEDUKE404]

Quiz answers

But no to the childcare. Childcare credit cannot be taken by a parent if the child does not live with him(her).

For question #1, pretty obvious even before my morning coffee. "Them's the rules!"

And answer to question #2 ??

FE

[mscash]

Who gets the writeoff

Nobody has asked whose dependents the children are.

[Kram BergGold]

Isn't the Question?

To me, the insurance is not in the name of the taxpayer, husband. It is in the wife's name, so there is no self employed health insurance deduction. But yes I would take it on Schedule A.