$8,000 temptation

[Dude]

Based on the early returns I am seeing, it seems that the difference in having a QC vs a QR is about $8,000 at modest incomes. I bet there will be much temptation to claim as a resident, a child who really is a visitor. Things like changing a child's address with the school and at the hospital may become more common. Custodial parents with shared custody agreements need to develop and maintain as much proof of the child's residency as possible.

[TaxGuyBill]

Based on the early returns I am seeing, it seems that the difference in having a QC vs a QR is about $8,000 at modest incomes.

I'm not sure where you are getting $8000. You must mean for multiple children, and that "modest income" means "perfect income to maximize EIC", right?

On the Federal return, there is only a $1500 difference between a Qualifying Child and a Qualifying Relative (per dependent) for the Child Tax Credit/Other Dependent Credit. So if you are getting a difference of $8000, that must involve multiple children and EIC.

[Dude]

Yes, I am talking about MAX EIC clients.

[kathyc2]

Based on the early returns I am seeing, it seems that the difference in having a QC vs a QR is about $8,000 at modest incomes. I bet there will be much temptation to claim as a resident, a child who really is a visitor. Things like changing a child's address with the school and at the hospital may become more common. Custodial parents with shared custody agreements need to develop and maintain as much proof of the child's residency as possible.

In what situation could a child be either a QC OR a QR?

[Dude]

[QUOTE=kathyc2;n296252]

In what situation could a child be either a QC OR a QR?[/QUOT

When you are talking about this kind of money, residency of the child is not a black and white issue. I think people need to collect as much evidence as possilble to prove where the child lived.

[kathyc2]

[QUOTE=Dude;n296255]

In what situation could a child be either a QC OR a QR?[/QUOT

When you are talking about this kind of money, residency of the child is not a black and white issue. I think people need to collect as much evidence as possilble to prove where the child lived.

If child did not live w/ TP >6 months, they would likely be QC of another TP, and therefore not a QR of TP.. What situation would you be making a determination of which they are?

[Dude]

[QUOTE=kathyc2;n296257]

If child did not live w/ TP >6 months, they would likely be QC of another TP, and therefore not a QR of TP.. What situation would you be making a determination of which they are?

Grandparents who support but do not live with child. This is very common. Father who does not live with kids more than six months. Sometimes they are not even fighting about it with the parent who seems to have the claim for QC because they are not required to file (public aid) OR more likely earned income is to low to max out EITC. Other times they will.

[kathyc2]

[QUOTE=Dude;n296258]

Grandparents who support but do not live with child. This is very common. Father who does not live with kids more than six months. Sometimes they are not even fighting about it with the parent who seems to have the claim for QC because they are not required to file (public aid) OR more likely earned income is to low to max out EITC. Other times they will.

Not seeing how child would be QR of the examples you cited. I'm still not following how if you determine child is not QC how you think they would be QR?

[Dude]

[QUOTE=kathyc2;n296260]

Not seeing how child would be QR of the examples you cited. I'm still not following how if you determine child is not QC how you think they would be QR?

Child did not live for six months with the person that supported them and wants to claim them. Since they are kin they are left with the option of QR but this is a pretty poor alternative when they see the amount of money they would have received had the child been a QC. Suddenly the child's residency is 'flexible". I see it as an issue

[kathyc2]

[QUOTE=Dude;n296263]

Child did not live for six months with the person that supported them and wants to claim them. Since they are kin they are left with the option of QR but this is a pretty poor alternative when they see the amount of money they would have received had the child been a QC. Suddenly the child's residency is 'flexible". I see it as an issue

They don't qualify for QR unless the child did not live with any relative for more and 6 months, or if the person who they did live with is not required to file and only does so to claim refund of tax withheld.

[Dude]

[QUOTE=kathyc2;n296266]

They don't qualify for QR unless the child did not live with any relative for more and 6 months, or if the person who they did live with is not required to file and only does so to claim refund of tax withheld.

Not many parents of QC's who get EITC are required to file. They are often under the threshold but file to get EITC. The grandparent or non custodial or shared custody parent <183 days often provides support but does not live with the child. Day counting and evidence of residency will become an issue. I think we will see this becoming even more of an issue now than in the past.

[Dude]

8332 will also be more valuable this year as the additional child tax credit is more. Of course this still wont help with getting the big EITC or the HOH deduction or even dep care expenses.