Typically custodial parents are characterized to claim the dependent child on taxes with 50/50 custody. The custodial parent can get significant tax advantages by claiming their child. The settlements of custody are complicated because the orders of custody change from time to time. Often the custody order tells who claims the child on taxes with 50/50 custody. But many times the custody order doesn’t answer this question. In that case rules of the IRS are implemented for tax purposes of the claimed child. Read this post to get more information…
Who Claims Child On Taxes With 50/50 Custody?
Generally, the primary parent is considered the custodial parent. Because the primary parent has the child’s primary custody and also the child mostly lived with the primary parent throughout the tax year.
But this is not happening in joint custody. In joint custody, the claims of children on taxes depend upon the incomes of the parents, their parenting times and the most important thing is the parent’s mutual understanding.
Which Parent Is Better To Claim Child On Taxes If Both Have Same Income?
Custodial parents are regarded as much better to claim the child on taxes. Here is a question what is a custodial parent? and what is the non-custodial parent?
The federal tax law specifies the custodial parents from the non-custodial parents. The custodial parent is the child’s primary parent because the child spends most of his time with the primary parent almost 182 days each year.
On the contrary, the non-custodial parent is the parent who doesn’t provide initial custody to the child and also doesn’t give too much time to the child.
Therefore the child lives with custodial parents and gets all the financial, physical as well as emotional support. Moreover, the Internal Revenue Service (IRS), orders the custodial parents to claim the child on their taxes.
The laws of the federal government remark both custodial and non-custodial parents. But the federal laws do not point out whether the custody is joint or 50/50.
In case the child is living with both parents and spends equivalent nights with each parent then according to IRS the custodial parent will be one whose adjusted gross income is greater than the other.
Who Should Claim a Child as a Dependent?
The taxpayer should claim the child as a dependent on taxes because only one taxpayer or citizen is capable of claiming a child as a dependent. Therefore the parents who file split returns typically have two choices such as mutual agreements and IRS tiebreaker rules for claiming the child on their taxes.
Generally speaking dependent is a person who is neither a taxpayer nor a spouse, but still is qualified for a tax return by claiming a third person.
A dependent is a person who needed financial protection from another person. Children and relatives are usually included in this.
Who Claims Child On Taxes With 50/50 Custody?
Some indirect relatives such as house partners are also included. After recognizing your dependent for tax return. you should report IRS that you have fulfilled all the requirements for claiming a child as a dependent.
As children and relatives are considered dependent, therefore the IRS settled the qualifying test for children or qualifying test for relatives. So that claim on the child can be attained as a dependent.
For qualifying the child test the child must be under 19 years of age and if any student allows for the test he/she must be younger than 24 years. The IRS rules do not give any age limit for handicapped students, who qualify for the child test.
Different Types of Child Custody
One parent or both parents can attain more than one type of custody. Because there are four various kinds of child custody such as joint custody, legal custody, physical custody, and sole custody. The parents can grant these kinds of child custody by the court based on a particular detail of each kind.
Legal custody of the child may be granted to one parent as sole legal custody and may be granted to both parents as joint legal custody. In sole legal custody court grant just one parent the to make life’s bigger decision for the upbringing of a child.
In joint legal custody, both parents mummy and daddy have the right to make life decisions about their child’s future, so that child can grow up healthily.
Legal custody makes sure that both parents are providing their child with a proper diet, good healthcare, education, religious education, and much more.
The court grants physical custody to one parent or both parents. In physical custody, both parents mutually decide with whom the child lives.
Physical custody is also categorized into joint physical custody and sole physical custody. In joint physical custody, both parents are allowed to live with their child with 50% time sharing.
Typically in physical custody, one parent is granted physical custody and the other parent is granted only visits authorities. In joint physical custody, both parents are considered custodial parents, and the child is allowed to spend their whole time with both parents equally.
While in sole physical custody, only one parent is regarded as the custodial parent and the child spends his whole time with that specific parent.
Joint custody is a kind of custody in which both parents are awarded joint physical custody and joint legal custody. If parents are granted joint legal custody of their child, they mutually handle important decisions about raising their child.
In another case, if parents are granted to have joint physical custody, the child is allowed to pass his time equally with both parents.
Sole custody is a form of custody in which only one parent is granted by the court to have both physical as well as legal custody of their child. In sole custody, only one parent has the right to raise his or her child.
Grandparents And Child Custody
In case when neither father nor mother is granted by the court for the upbringing of children then third persons like grandparents and any other relative are allowed to take custody of the child.
Claims Child As A Dependent When Parents Are Divorced
The divorced, separated, never married couples and couples who are living apart from each other must follow the rules of court to claim the child as a dependent.
Because divorce is itself complex, as two partners are separated emotionally, physically, and financially in divorce. Divorce decree becomes more complex when children are also included in this.
After divorce partners must be taken into account how to bring their child or children (if they have more than one child) according to the child custody contract.
The divorced parents should also consider claiming the child with their taxes in 50/50 custody. Because a 50/50 child custody contract is also complex just like divorce.
The IRS applies specific rules to custodial parents for 50/50 child custody. According to IRS, just one individual is considered eligible for claiming a child on 50/50 custody as a dependent if the child fulfil the qualifying child rules. IRS does not allow parents to divide the tax benefits of their child.
The concern of the Child
The concern of the child also matters in 50/50 custody. Typically the law is of opinion that a child should have bonded with both parents.
Because both parents brought up the child in a better way as compared to one parent. Therefore the parents consider their child’s upbringing their priority and should nurture their child in a good way.
When the two divorced partners have failed in deciding on claiming child custody, then the court takes into account the concern of the child. The court makes the custody contract regarding the child’s mental, dental, emotional, and physical health.
50/50 Custody Benefits for Kids and Parents
The federal law continuously makes changes in tax laws. Still, 50/50 custody provides many essential benefits for both kids and parents. Separated parents can also obtain tax breaks and tax exemptions so that they can treat their children properly.
The first and foremost benefit of 50/50 custody is that child has a chance to live with both parents. Both parents are fully aware of their parenting duties and both largely contributed to nurturing their children.
The child will grow properly when one parent assists him in studying and the other helps him in sports. Children have more relations with their parents friends and other relatives. Children enjoy life more with both parents instead of one.
The second benefit of 50/50 custody is that child lives a happy life with both parents. The absence of one parent can create a great disturbance in a child’s life.
Especially the absence of a dad makes the child insecure. The most child without fathers has low confidence, bad behavior, and inadequate mental health.
The third benefit is that children typically have two houses of both parents in 50/50 child custody. Having two houses means having more space and more features for playing. The child gets happy moments by playing at two different places.
The fourth benefit is that both parents give their specific time to their child. Both parents spend most of their time in parks with their children.
They play games with them and help them in studying. Both parents spend proper time with the child so that they share problems with them.
The fifth benefit of 50/50 custody is that child gets higher living standards and more financial resources from both parents. Both parents mutually meet the financial requirements of their child. Both parents provide financial support to their children to cope with financial problems.
What Tax Credits Are Available For Parents?
There are mainly four tax credits available for divorced parents. The federal law and state tax laws generally regarded these tax credits as advantages and exemptions for divorced parents. These are as follows,
Child Tax Credit
Parents whose children are the age of 16 years old need this child tax credit. Because 16 years old children require more financial support which is not offered by dependent care tax credits.
Head of Household (HOH) filing status
Parents who need to pay their household bills require this tax credit. These parents nurture leastwise one child as a dependent with half of the household billing. The tax rates in HOH filing status are lower but the standard deduction is higher so during the time of filing you should keep in mind the required criteria.
Earned Income Tax Credit (EITC)
This tax credit is particularly for a parent whose salary is not enough. If any parent whose income is low to moderate can apply for this tax credit with qualifying children.
Child Care and Dependent Care Tax Credit
Child tax care credit is particularly for children of 13 years. Because at this age children require preschool and a babysitter. Child care and the dependent care tax credit are especially for those people who have to pay expenses for child care even during their work.
Form 8332 vs Divorce Decree
Form 8332 is specifically for custodial parents. Custodial parents use this form for discharging the child care tax claim. Because when the custodial parent releases this form the noncustodial parent also claims for exemption of the child.
This form has some complicated effects. This form also can cancel the earlier claim of exemption of child care. Paperwork is necessary for signing form 8332 and it is a property settlement.
Contact Professional Lawyer
The custodial parent must work with a professional lawyer as they are the first claims a child on taxes with 50/50 custody. The custodial parent must talk with a professional child custody lawyer privately.