A taxpayer entitled to claim a qualifying child under age 17 as a dependent is entitled to a child tax credit of $1000 for each dependent child who has not reached the age 17 by the end of the calendar year. The child must be a US citizen or resident. A tax credit is different from an exemption in that the tax credit reduces your liability by $1000 whereas a tax exemption reduce the adjusted gross income in arriving at a taxable income.
To be claimed as a taxpayer’s dependent, a qualifying child must not have provided over one half of the child’s own support for the calendar year. Support includes food, a place to live, clothes, medical and dental care, recreation and education.
A dependent must be either a qualifying child or a qualifying relative. A qualifying child must be a son, daughter, stepson or stepdaughter of the taxpayer or a descendant of such a child; or a brother, sister, half brother, half sister, stepbrother, stepsister of the taxpayer. A child includes legally adopted children and an eligible foster child.
If a qualifying child is claimed as a dependent by both parents and the parents do not file a joint return, the child is normally treated as the qualifying child of the parent with whom the child resided for the longest period of time during the taxable year.
However, the Family Code allows the dependency exemption and child tax credit to be shifted to the noncustodial parent when a child receives over one half of the child’s support during the calendar year from the child’s parents who are either divorced, legally separated, or living apart at all times during the last 6 months of the calendar year. To shift the exemption the custodial parent must release his or her claim to the exemption for the year.
Tax aspects relating to custodial time are very complicated. Therefore, it is very important that you seek the legal advice and expertise of an experienced family law attorney. At Wallin & Klarich, our attorneys have been in practice for over 30 years and will diligently represent your interests to the fullest extent possible. Call us today at 888-749-7428 or visit us online at www.wkfamilylaw.com. We will be there for you when you call.
