I have another blog post about split exemptions. If you’d like more information about that, or if you’d like to know if you should even be doing a split exemption, then you should read that first. Here’s a link to that page: http://robergtaxsolutions.com/2011/11/split-exemption-claiming-one-child-on-two-tax-returns-%E2%80%94-the-legal-way/
This page is about the nuts and bolts of how to actually prepare a return with a split exemption. I’ve gotten a lot of calls and emails asking me how it‘s done. I’m using the 1040.com software package that’s on this website for the example. If you’re using Turbo Tax and have questions, call the 800 number on the box. They have trained experts to talk you through it. (Sorry, Turbo Tax doesn’t pay me so I can’t tell you how to use their product.) If you need Turbo Tax help but don‘t have the box, go to this site and send them an email, they’ll contact you: https://turbotax.intuit.com/support/contact/index.jsp?_requestid=15543
This is how it works in 1040.com
If you are the custodial parent, claiming the head of household status and the EIC, this is what you do:
1. First thing: Once you log into the software, the very first question you get is what is your filing status. You’re going to say Head of Household.
Then you’ll complete the rest of the form with your name and address information.
The next section is the dependents screen. First it asks if someone can claim you as a dependent. If you’re splitting an exemption, then the answer to this had better be “No.”
Do you have any dependents to claim: Yes
Did you pay for the care of a child, etc: Yes if you did, no if you didn’t. When splitting an exemption, the custodial parent is the one who gets to claim the child care credit if your child is in daycare.
Go to the next page.
Now you’re on the forms review page. Under dependents it says “add a form.” Click on that.
On the dependent screen, you are going to fill out all the information about your child; the name, social security number, etc. But in the check boxes below you are going to check the box that says: “Child is not your dependent but does qualify you to file as Head of Household”.
The next section is for Child and Dependent Care Expenses—If you have those complete that section.
The next section is about EIC. Answer those questions. Generally the answers should be NO, NO, NO. Question 13a—where it asks is someone else qualifies to claim this child? Your ex cannot claim EIC—your ex is claiming the dependency exemption, so you should answer NO.
When you finish the screen, it will send you back to the dependents screen again. If you have another child, you’ll add another form. If you’re done, click next.
Then you’ll complete the rest of the program by inputting your wages and other income.
After you’ve input your income information, you’ll be inputting your deductions.
Then you’ll have the state information for your state return.
You’re almost done. There are more questions you’ll need to answer before you finish.
When you get to the part where you “Review Your Return” you want to click on the “Preview Your Return” section. This is where you check to make sure it’s right. This is what to look for:
1. Your filing status will be Head of Household, box 4
2. In the line below it, it will have your child’s name and social security number
3. In the exemptions section, it will show that you have claimed yourself; it will not show your child’s name in that box at all
4. On page 2 of your 1040 form there will be nothing on line 33, or line 39 (the child tax credits).
5. On page 2, if you do qualify for EIC, then there will be something on line 38a.
If that’s how your return comes out, then you’ve done the split exemption correctly.
Note: if you have other children that will not have split exemptions, then you will have names in the dependents screen and probably numbers in the child tax credits line. You might want to do the split child first and check the return, then go back and add the other children.
If you are the parent claiming the exemption and the child tax credit, but not the head of household status and EIC—then here are your instructions.
1. Starting from the beginning, you will first choose your filing status. The split child cannot make your Head of Household so unless you have another child that lives with you; this is not your status. You’ve going to be married or single.
2. When you get into the dependents – dependents information, you will answer the questions,
Can someone else can claim you as a dependent? No.
Do you have any dependents to claim: Yes
Did you pay for the care of a child, etc: No—even if you paid for the child care expenses, since you are not the custodial parent, you are not entitled to this tax credit?
3. In the dependent screen, you will fill out all the information about your child, but the box you are going to check is “Child did NOT live with you due to divorce or separation.” In the section that says “months lived with you” you will answer “zero.” Even if your child did live with you for a few months, check zero here to make the program work.
4. You will check NO under the child care expenses.
5. In the EIC section you will check the box that says, “Dependent is not eligible for EIC.”
6. Next you’ll complete the rest of the tax return like you would any other.
7. When you get to the finish, you’ll want to check your return to make sure your child is listed correctly.
When you review your return, your filing status will be single (or married if you’ve remarried) but it will not be head of household.
You child’s name will be listed in the exemptions section.
You will have a number on one or both of the child tax credit lines.
You will not have anything listed on the EIC line.
If both parents file the split exemption correctly, you should have no problem with the IRS over claiming your child.