Unmarried parents living together, can each file a 2441?

[jesusbowls]

Mother had $1250 in Dependent Care FSA employer benefits.  She does not claim the kid as a dependent.  I filed her return listing the kid with code Q, "Not a dependent (but is a qualifying person for the earned income credit and/or the credit for child and dependent care expenses)".  I did this so I could attach Form 2441 to substantiate the Dependent Care amount of $1250 to make it non-taxable.  Her return was accepted.

Today I prepared the father's return.  Claimed child as dependent.  Included form 2441 with $1750 out-of-pocket expenses (being aware of the $3K max per child).  The return rejected citing as follows:

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Error Detail:
Each Form 2441 'QualifyingPersonSSN' provided must not be the same as a Form 2441 'QualifyingPersonSSN' of another accepted tax return for the same tax year. Visit [URL redacted] for additional information. To electronically file with this duplicate condition, an Identity Protection Personal Identification Number (IP PIN) will be required. If you wish to get an IP PIN and you don't already have an account on IRS.gov, then you must register to validate your identity. Please visit [URL Redacted] for further information and resubmit your return with an IP PIN.
Error Resolution:
This return has been rejected by the IRS, because one or more qualifying persons identified on Form 2441 Part II, Line 2(b) has already been claimed as a qualifying person on another taxpayer's return. To identify the qualifying person in question, review the "Description" field above. The path statement has a number enclosed in brackets, [x]. This number identifies the qualifying person on Form 2441 that caused the reject.

Verify that the qualifying person's SSN has been entered correctly. If necessary correct the SSN and resubmit this return.

If no data entry errors are identified, and you want to electronically file this return with the information currently entered on Form 2441, an Identity Protection PIN will be required. Visit [URL redacted] for further information.

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So, I'm confused by the error resolution.  If the father obtains an IP PIN for the child, can we legitimately file the father's return as-is with the 2441, or is it improper to file a 2441 for the same kid on two different returns?

Thanks!

[TaxGuyBill]

It is improper to claim the credit on Form 2441 on both return.

Because the parents are living together, only one parent can claim ALL benefits for the child.  The other parent can't claim any benefits for the child.

[jesusbowls]

I understand what you are saying, but is there documentation anywhere about this?  If you are correct, then what is the point of code "Q" for the dependents, which reads "Not a dependent (but is a qualifying person for the earned income credit and/or the credit for child and dependent care expenses"?  It seemed to me that code Q exactly addresses what I was trying to accomplish.

Further, I can keep the mother's return with code Q and Form 2441, and file the father's return without Form 2441, in which case mother would get tax-free dependent care FSA, and father would get CTC and HoH status, so that's a scenario where both parents are getting some sort of benefit for the child (counter to your statement that "Because the parents are living together, only one parent can claim ALL benefits for the child."

Appreciate any further insight anybody can offer.  Thank you!

[IRonMaN]

"If you are correct, then what is the point of code "Q" for the dependents"

It may seem rare to you, but some folks that have kids split up and don't live in the same household.

[jesusbowls]

Yes, I understand that, but what would ever be a reason to list a dependent as code Q if not trying to get dependent care credit for a non-dependent?

[TaxGuyBill]

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@jesusbowls wrote:

but what would ever be a reason to list a dependent as code Q

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The child lives with you (the custodial parent).  But you've given the 'ex' (the noncustodial parent who does not live with you) a Form 8332 to claim the dependency.

In the scenario, the 'ex' can only claim the exemption and the Child Tax Credit.  The Custodial Parent (claiming the kids with "Q") can potentially claim the Dependent Care Credit, EIC and Head of Household.

[jesusbowls]

Thank you for the information.  In this case, then, I think I did it wrong.  I had the mother list the dependent with Code Q which allowed her to claim the dependent care credit (more specifically, make her Dependent Care FSA non-taxable).  The return was accepted, but it sounds like you're saying that with code Q, you're not supposed to be able to use form 2441?

[TaxGuyBill]

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@jesusbowls wrote:

I had the mother list the dependent with Code Q which allowed her to claim the dependent care credit (more specifically, make her Dependent Care FSA non-taxable).  The return was accepted, but it sounds like you're saying that with code Q, you're not supposed to be able to use form 2441?

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If they didn't live together, you would have done it correctly.  As I said before, the Custodial Parent (claiming the kids with "Q") can potentially claim the Dependent Care Credit, EIC and Head of Household.

But because they did live together, only ONE parent can claim ALL benefits.  The other parent claims nothing.

[d-erese]

Similar use of Code "Q" here also, but in my situation the parents are divorced and do not live together, both had dependent care for their child. Father claimed child and dep care, then Mom claimed only dep care and it rejected her, even though the amount was not maxed out on either parent.