Many of you who also frequent MPSIMS and IMHO know of my divorce last year. In that divorce, I agreed to every-other-weekend “parenting time” with my children. I pay draconian child support ($1800/mo) (which can’t be deducted) and another $400 a month for half the child care costs.
This whole time I thought I’d be able to claim the child-care tax credit on my federal taxes but I don’t think I’m able since I didn’t have the children in my care for more than 50% of 2007 (and won’t for 2008 either).
The federal rule reads that I can claim the child-care tax credit if (among other things):
I took this to mean custody in the state sense but I read a paragraph yesterday on the state papers that says that the Feds use the term “custody” in the manner that the state uses the term “parenting time”. I have half-custody in the states eyes, used to determining schooling, etc. I have only about 7% “parenting time” in their eyes since I see the kids every other weekend (plus dinners and so forth but only overnight vists count).
This, and the rejection of my federal e-filing for duplicating the kids’ names on the child-care form, lets me know that I cannot get credit for my near $5000 in child care paid last year. This, of course, really suX0rs since that means I don’t get a federal refund of $450, I’ll have to pay ~$600 instead.
Now I’m playing the “What next?” game. Is there anything I can do in 2008 that’ll help me next year’s filing? Is there any option for using my $5000 paid in 2007 besides the dependent care credit?
I’m only interested in legal tax actions, of course.
Wow, that sucks. I wonder if your ex-wife is claiming the entire amount, since presumably she’s probably getting receipts for the entire amount? In which case she’s receiving a free refund on your dime.
I don’t know what she put on her form for the child-care amount. She put all three kids on her return, which by the federal rules, seems correct. She had the greater custodial time. What burns me is that I get zippo - how does her money paid to work differ from my money paid so I can work. That aside, she’s within her legal rights to do what she did.
I tried tweaking the state child-support calculations to figure what happens if I don’t pay the child care and she pays it all. The calculator just raises my child-support by an amount that effectively makes me pay half the childcare. Since I can’t write-off child support, there’s no tax advantage there.
My agreement with the ex was that he claimed what he paid in childcare fees AND he could claim the oldest child every other year on taxes as long as he paid the child support on time and kept insurance on them.
There is a way to write off your part of the childcare expenses since it is seperate - but you’ll probably need to consult a professional. Same thing with medical. Just make sure you get receipts for what you pay and pay directly to the childcare giver.
You might want to even consider a review (I think you can request one every 2 years - but be careful because it might go up if your income has increased since initial support was set… then again, it might decrease if it has stayed the same or lowered) and ask to claim the youngest child on your taxes (and maybe set it up so ex gets to claim all childcare but you get to claim child every year).
But you get a standard deduction for them you insensitive clod. I can’t deduct the costs of raising my dog, nor take a standard deduction. I knew I should have gotten her a social security number.
One fair thing to do would be to have the ex fill out the tax software fields based on what she paid, and then again based on the total you both paid. Then, she would give you the difference between the two refund amounts. Unfortunately, one of the many shitty things about divorce is that they’re not fair. I don’t see this happening.
Nitpick: dependents don’t affect your standard deduction. More dependents instead increases your exemption amount.
To the OP, can you talk to your ex? If they live with her most of the time, she technically deserves the deduction, but she can give it to you for every or specific years in the future if she is amenable. You need Form 8332(PDF) filled out
If you and your wife both work and you file as “married filing jointly”, then you can, indeed write off the child care costs you both pay so you can work.
I pay child care costs for my dependents so I can work, why shouldn’t I be able to write off my half of those same costs?
As to the child support costs, I give my ex-wife $22,000 per year tax free which she spends on her household. Why shouldn’t she have to count that as income? That’d be the rule if it were alimony and not child support. It’s still household income.
As to talking her into not claiming one child for child care, the federal forms seem to allow that for claiming dependents but don’t seem to imply any analog for child care. It says pretty clearly that it’s all about custodial percentages.
From a practical point of view, it’d probably be a win-win situation. The credits for 2 kids are the same as the credit for three it seems. The documents give instructions for 1 child and then “2 or more” children.
I was talking about all costs of raising a child, not just the cost of daycare. I pay taxes on the money I earn and then I spend some of it on my kids. You pay taxes on the money you earn and then you spend some of it on your kids. Sounds fair to me.
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I pay child care costs for my dependents so I can work, why shouldn’t I be able to write off my half of those same costs?
Someone has to pay the income tax on that money. Congress has decided that the person who pays child support pays the income tax on it. Congress decided that alimony works differently. I don’t see a logical reason to shift the income tax burden for child support to your wife. The money is for your children. It is money you presumably would have spent on them if you were still married.
