HOH rules

[Judysam]

Just exactly what is the difference(s) between previous years' rules and 2005? It all seems so confusing.

[RLymanC]

Hoh

HER GOES:

Last year if an unmarried couple and there child lived togeather all year and the father made 35,000 and the Mom made 14,000 they could file:

Father HOH, and takes the child tax credit.
Mom files single and takes the Earned Income Credit.

This year if the Father provides over one half the cost of keeping up the home and he allows the Mom to claim the child as a dependent the result is

Father files single and no credits

Mom files single and gets all the credits she is qualified for. In this case she is not qualified to file HOH because Pop payed over 50% of costs.

So both file single

If Pop takes the child there would be no EIC, that would cost $2662. He would get $1000 CTC, plus all other available credits he qualifies for.

This year it all or nothing,,,,,,no split using the same qualifying child.

Another change:
If your unmarried 20 year old son lives with you this year and earns over $3,200 your filing status is single becuase you must be able to claim your son as a dependent to file HOH

Last year your son did not need to be your dependent as long as he was unmarried and passed the residency test you could file HOH.

[Gretel]

Hoh

Great question. Great answer.

I found myself left confussed but now it's better. I had a hard time understanding that the "uniform definition of a child" does not just mean this definition is applied for all benefits it also means a kid can not be split for purposes of these benefits.

[Unregistered]

Another change:
If your unmarried 20 year old son lives with you this year and earns over $3,200 your filing status is single becuase you must be able to claim your son as a dependent to file HOH

Last year your son did not need to be your dependent as long as he was unmarried and passed the residency test you could file HOH.

Where in The TB is this stated. What page.
Thanks

[Bees Knees]

Where in The TB is this stated. What page.
Thanks

Page 3-16, last example.

[Unregistered]

Thanks Beeeeeeees Kneeeeeees

[Koss]

Splitting up benefits

While it is very clear from IRS instructions and publications that the IRS is taking the position that the various benefits cannot be "divided up" between taxpayers, I simply do not see this anywhere in the Internal Revenue Code. The code has been amended in an effort to use the "same definition" of a child for all benefits, but I do not see any language in the code that clearly prohibits two taxpayers from claiming different benefits for the same child.

The most perplexing part of this for me, at least right now, is Form 8901, which clearly states that a person may claim the Child Tax Credit for a qualifying child that is not her dependent. Why is their qualifying child not her dependent? Because she herself is a dependent of someone else.

I can see this happening in some cases where the father is out of the equation, and a young single mother is living with her parents. What baffles me is why the baby would not be a dependent of the woman's parents. And if the baby IS a dependent of the woman's parents... is the IRS allowing one taxpayer to claim the dependent exemption while another taxpayer claims the Child Tax Credit?

This question, of course, brings us back to the unmarried couple. Some argue that for the unmarried couple (child is his, not hers, she has little or no income) the child cannot be his qualifying relative because the child is her qualifying child. But if she has little or no income, then he may be able to claim a dependent exemption for the woman, which will prevent her from claiming a dependent exemption for her child. Somehow, the reasoning goes, her child is still her qualifying child for the Child Tax Credit.

But if her income is low enough to maker her his dependent, the Child Tax Credit will not amount to very much, unless she has three children and is eligible for the Additional Child Tax Credit. But even then, if her income is under $3200...

The definition of a qualifying child is embedded in the definition of a dependent, within IRC 152. Where in the tax law are we directed to FIRST determine whether a person has a qualifying child, without regard to the question of whether the person may claim a dependent exemption for the child?

In IRC 24 and IRC 32, the code sections for CTC and EIC, respectively? These code sections refer the reader to IRC 152(c) for the definition of a qualifying child for these credits, with some modifications to the definition. But nowhere does it say that all the benefits are somehow tied together. Clearly, a person can have a qualifying child for EIC, but not for purposes of the exemption, because for EIC, the support test does not apply. And someone may have a qualifying child for purposes of the exemption but not for CTC, if the child is 17 or older.

Each section of the code still seems to have a slightly different definition. I don't see how the IRS can take the position that the two different taxpayers cannot use the same child for two different benefits, particularly if each taxpayer is not eligible for that benefit that he is not claiming.

More on this coming.... I've updated my website, and I'm working on some new theories about this.

Burton M. Koss
koss@usakoss.net

https://www.usakoss.net

[Unregistered]

More on this coming.... I've updated my website, and I'm working on some new theories about this.

Burton M. Koss

We don't need theories we need interpretation of the LAW.

[dtlee]

if the baby IS a dependent of the woman's parents... is the IRS allowing one taxpayer to claim the dependent exemption while another taxpayer claims the Child Tax Credit?

This is indeed confusing.

The only thing that comes close is the tiebreaker rules. If you read those out of context, you would assume that a Qualifying Child is a Qualifying Child and if two or more people claim the child as a Qualifying child (even for different purposes), the tiebreaker rules would be applied. However, as you have pointed out several times, this is in the section of the code defining a dependent. Thus, it would follow that the tiebreaker rules apply to dependency. It makes sense that two taxpayers cannot claim the same dependent (although none of this really needs to make sense).

I can understand why the IRS wants to tie all of these together to make administration easier. However, I agree there is nothing that I have seen in the law that specifically excludes the woman's parents from claiming the dependent in your example, even though it seems apparent that the IRS may want to enforce the rules that way.

[Snaggletooth]

To the Unregistered Guest

..who doesn't give his name, and stands behind trees to throw rocks at Koss:

Please measure your value by whatever contributions you have made to our forum. Burton has contributed much, as well as an ENORMOUS amount of research and time posting to our message board.

And stand behind your words by giving us at least your name.

As for myself, I'm easy to find. Come to Tennessee, and ask. Anyone in Manchester will tell you where I am.

Ron Jordan, Manchester, TN

[JG EA]

Just a thought.

...I do not see any language in the code that clearly prohibits two taxpayers from claiming different benefits for the same child.

I'm thinking out loud here. A qualifying child is "qualifying". If the child qualifies a taxpayer, well then she qualifies that one taxpayer. Since the definition of a qualifying child is more or less the same for all the categories then the benefits go with that qualification.

The definition of a qualifying child is embedded in the definition of a dependent, within IRC 152. Where in the tax law are we directed to FIRST determine whether a person has a qualifying child, without regard to the question of whether the person may claim a dependent exemption for the child?

The other benefits, though, relate back to the definition that is embedded in the definition of a dependent. Doesn't that tie them together?