Dependent Care Expenses

[jjchavez123]

I have a client that is divorced and had dependent care expenses but this is not his year to claim the child.  I added the child and used code Q but when I filed the return it rejected saying that his ex already claimed dependent care expenses.  Is my cliend just out of luck?  

[Just-Lisa-Now-]

only the custodial parent can claim dependent care credit...so if hes the non-custodial parent that only gets to claim the kid every other year, yes, hes out of luck.

But if hes the non-custodial parent Code Q wouldn't be correct, the custodial parent uses Code Q, the non-custodial parent uses Code N

[Jonesin1]

As the non-custodial parent, he is not allowed the dependent care credit, even though he is claiming the dependent.

There is a special rule in the case of divorced & separated (including never married) parents. When the non-custodial parent is claiming the child as a dependent/exemption/child tax credit; the custodial parent is still allowed to claim the same child for Earned Income Credit, Head of Household filing status, and day care credit. This "splitting of the child" is not available to parents who lived together at any time during the last 6 months of the year; then only one of you can claim the child for any tax reasons. The tax benefits may not be split in any other manner.

https://ttlc.intuit.com/community/tax-credits-deductions/discussion/ex-husband-not-able-to-claim-chi...

Note in particular that the non-custodial parent can never claim the Earned Income Credit, Head of Household filing status or the day care credit, based on that child, even when the custodial parent has released the exemption to him.

 So, it's good idea to let the other parent know that you will be claiming those items, as many first time divorced parents are not aware of this rule and may try to claim those items, which will cause the IRS to send out letters.

Ref: https://www.irs.gov/publications/p17#en_US_2017_publink1000170897

Scroll down to "Children of divorced or separated parents (or parents who live apart)"

[jjchavez123]

Thanks for your assistance