Qualified Child (QC) and Custodial Parent Requirements Flashcards
What are the four Qualifying Child Tests?
- Relationship
- Age
- Residency
- Support
What is the Relationship Test for Qualifying Child?
- son, daughter - descendants
- brother, sister - descendants
steps/halves - adoptive individuals and eligible foster children
What is the Age Test for Qualifying Child?
- under 19 at end of year AND younger than TP
- under 24 and a full-time student (enrolled 5 months in school of on-farm training course) AND younger than TP
- permanently and total disabled AND any age
* MFJ: QC must be younger than TP or spouse but not necessarily both
What is the Residency Test for Qualifying Child?
Must live with the TP for more than 1/2 the year
- includes child that dies during the year
- includes temporary absences
- In divorce situation - most commonly custodial parent
What is the Support Test for Qualifying Child?
A child can not provide more than 1/2 his own support
- A child’s income is not included unless it is used for support
- Gov’t benefits to child is considered support by child
- Gov’t benefits to parent is considered support by parent
- Scholarships are not counted as support
What three type of learning do NOT qualify you to be a “student” for tax purposes?
- on the job training
- . correspondence school
- school offering courses only through the internet
What are the two requirements for a child to be considered permanently and totally disabled?
- They can’t engage in gainful activity due to physical/mental limitation
- Doctor determines condition will last continuously for a year or can lead to death
What are the six temporary absence reasons that do not affect the residency test for QC?
- education
- business
- military
- juvenile detention
- illness
- vacation
Who is the custodial parent of a QC?
The parent with whom the child lived the greater nights during the year. If child lived with each parent an equal number of nights, then custodial parent is the one with higher AGI.
Who is the custodial parent if the child lives with both parents an equal number of nights?
The parent with the higher AGI
Who is the custodial parent for an emancipated child?
The child is not counted as living with either parent during the time the child is emancipated. Parents can only count the nights prior to emancipation. The parent with the most nights is the custodial parent. If equal = parent with highest AGI is custodial parent.
What is an 8332?
A custodial parent allows a non-custodial parent to claim the child for ONLY:
child tax credit
additional child tax credit
credit for other dependents
If parents were never married and lived apart the entire tax year, then who is the custodial parent?
Divorced and legally separated rules apply. Custodial parent is the one that the child spent the most nights of the year with. If the nights are equal then the parent with the highest AGI is the custodial parent.
What is the Joint Return test for Qualifying Child?
The child can not file a MFJ return. Exception: Child or spouse only files to get with holdings or estimated payments back. fail if filed to get a credit
If a child is the QC of more than one person can the two people agree to divide the tax benefits?
Nope!
In general, how do you determine who gets the tax benefits if a child is the QC for more than one person?
- spouse - custodial parent rules or 8332
2 other - Tie Breaker Rules
What are the five tax benefits of claiming a QC?
- child tax credit or other dependent tax credit
- HH
- child and dependent care credit
- exclusion of income for dependent care benefits
5 .EIC
Tie Breaker rule for QC when one of the people is the child’s parent.
The parent claims the QC
Tie Breaker rules for QC when two parents are involved
- If the parents file MFJ the child is their QC
- The custodial parent gets QC
- number of nights the child spent in a parents home is a tie then parent with higher AGI gets QC
Tie Breaker rule when NO PARENT can claim the child as QC
The child is the QC of the person with the highest AGI
Tie Breaker rule for QC when a parent could claim the child but does not
- the child is the QC for the person with the highest AGI
- that person’s AGI must be higher than the highest AGI for a parent that could claim the child
If there is more than one QC can two TPs split the children up so that both TPs can claim the tax benefits?
YES!
Can a tax payer that is a QC have a QC?
NO!
If a the child is the QC of a parent and a grandparent can the parent give the QC to the grandparent?
YES
If the Julie is a dependent of Ann, can Julie claim her daughter Susie as her QC?
No. A dependent TP can not have a dependent.
What is the Gross Income test for QC?
There is none!
What is the Support Test for QC?
Child must not provide over 50% of their own support
What is the Support Test for QR?
The TP must provide over 50% of the individuals support.
What is the Age Test for QR?
There is none
What are the three tests that must be passed to become any kind of dependent?
- Citizenship Test
- MFJ Test
- Not a dependent test
What is the Citizenship Test for both QC and QR?
dependent must be one of the following: US citizen US national US RA Resident of Canada or Mexico
What is the MFJ Test for both QC and QR?
You can not claim someone who files MFJ as a dependent UNLESS they are only filing to get back withholdings or estimated payments
What is the Not A Dependent Test for both QC and QR?
In order to claim a dependent the TP and spouse can not be dependents
Is child support considered when determining Dependency Support Test?
yes
How much child support is included when determining the Dependency Support Test?
Only the amount paid for the year. Do not include the amount paid that was owed for prior years.
