Who Is Eligible To Reimburse Child Care Costs Following A Divorce?

The tax benefits related to a dependent child can only be claimed by one person who meets the qualifying child rules PDF. Parents cannot share or split up these tax benefits on their respective tax returns, so it is crucial for each parent to understand who will claim their child on their tax return. To claim the credit, you must complete Form 2441, Child and Dependent Care Expenses, and include the form when filing your Federal income tax.

To qualify for the child tax credit, a parent must have a qualifying dependent child younger than 17 at the end of 2023. However, only one divorced parent is allowed to claim the credit. For children who will be five years old or younger as of December 31, 2021, payments will be up to $300 per month.

To qualify for the child tax credit, a child must demonstrate that they meet the IRS’s earned requirements. Sometimes, but not always, it depends on which parent is allowed to claim the child as a dependent even though the Tax Cuts and Jobs Act (TCJA) eliminated it. If the parents are separated and share custody, they can each claim part of the child care costs they paid.

The special rule for divorced or separated parents allows only the noncustodial parent to claim the child as a dependent for the purposes of the child tax. In cases of separation throughout the year, only the custodial parent may claim the child care expenses. When you are separated, the parent who offers primary care to the child or children is eligible for the benefits. When parenting is shared equally, the benefits are shared equally, but only the custodial parent can claim the credit for child and dependent care expenses or the exclusion for dependent care benefits for the child.