Child Tax Credit

[peanut]

I make a to do list during tax season & then go back over this time of the year to review certain returns when I have more time. I have a client ( actually two) divorced husband & wife that have a child under 17. The ex wife in the past has signed off and allowed the exemption to the ex husband. for the child. The husband due to high income can not utilize the child care credit. .Somehow I thought I had made a mistake by not claiming the child tax credit on the wife's return even though she did not claim the exemption after reviewing the qualifying child regulations on the back of the Form 8901----however after further review there are very limited situations where Form 8901 apply. Does everyone agree? Now it appears probably the exemption would be worth more to the wife. Has anyone filed amended returns changing the exemption for both the husband & the wife.? Comments would be appreciated.

[David1980]

Your conclusion matches mine. 99.999999% of the time the CTC will always follow the exemption. (Though a TON of prepares will check the box "8901" in their tax program without reading through the form instructions in order to claim CTC without the exemption, mostly out of ignorance of the tax law.)

I don't see any issues filing amended returns for both the father & mother, but only if both are in agreement. She did after all sign the exemption over to the father and if the father doesn't want to give it up you really can't do anything.

[solomon]

I make a to do list during tax season & then go back over this time of the year to review certain returns when I have more time. I have a client ( actually two) divorced husband & wife that have a child under 17. The ex wife in the past has signed off and allowed the exemption to the ex husband. for the child. The husband due to high income can not utilize the child care credit. .Somehow I thought I had made a mistake by not claiming the child tax credit on the wife's return even though she did not claim the exemption after reviewing the qualifying child regulations on the back of the Form 8901----however after further review there are very limited situations where Form 8901 apply. Does everyone agree? Now it appears probably the exemption would be worth more to the wife. Has anyone filed amended returns changing the exemption for both the husband & the wife.? Comments would be appreciated.

If the wife executed a 8332 and it was attached to the husband's return (or via 8453), what reason would you give on the 1040X for changing the exemption back to the wife? I don't think the honest reason would fly - namely, his income was too high to get the benefit of the CTC.

Form 8901 does not apply. When she released the exemption, the CTC went with it.

[Jesse]

I don't have an answer but I thought I would bump it to the top as it is an interesting question. If noncustodial parent filed and form 8332(signed by custodial parent) was mailed with form 8453 is it a done deal for the custodial parent?

I don't see a problem with the noncustodial parent amending, but can the custodial parent change her mind? The Form 8332 is non-revocable and by signing the 8332 she has agreed not to claim an exemption for the named child.

If the wife executed a 8332 and it was attached to the husband's return (or via 8453), what reason would you give on the 1040X for changing the exemption back to the wife? I don't think the honest reason would fly - namely, his income was too high to get the benefit of the CTC.

Form 8901 does not apply. When she released the exemption, the CTC went with it.

Why couldn't you use this for a reason. In my mind it is not evading taxes or unethical. I have done a switch for EIC, but there was no form 8332 as unmarried parents lived together.

Just thinking out loud, any other thoughts?