Nolo's Essential Guide to Divorce - Emily Doskow [99]
What does it mean to be "considered unmarried"? You have to meet
five requirements:
• You must file separately from your spouse.
• You must have paid more than half the expenses of your household during the tax year.
• Your spouse must not have lived with you for the last six months of the tax year.
• You must have had custody of your child for more than half the time during the tax year.
• You can claim the dependent exemption for your child (you meet this test even if you've voluntarily agreed to allow your spouse to claim the exemption).
Tax Credits
In addition to the dependent exemption, there are a number of potential tax credits available to parents.
• The child tax credit provides a credit for a child who's under 17, didn't provide more than half of his or her own support during the tax year, and lived with you for more than half of the tax year-unless you are a noncustodial parent taking the dependent exemption for that child by agreement with your spouse. In that case you can take the child tax credit as well.
• The child care tax credit can be taken only by the custodial parent and only if you file jointly; the credit reimburses you for child care expenses up to a certain amount.
• The education tax credit applies to either a custodial or noncustodial parent and follows the dependent exemption; it's a tax credit for post-high-school education expenses.
• The earned income tax credit applies only to a custodial parent, and is available only to parents with earned income below a certain amount (in 2007, it was $34,001 for one qualifying child and $38,348 for more than one).
Check out the IRS publications. You can learn everything you wanted to know-and more-about divorce and taxes in IRS Publication 501, Exemptions, Standard Deduction, and Filing Information, Publication 504, Divorced or Separated Individuals, Publication 972, Child Tax Credit, and Publication 503, Child and Dependent Care Expenses.
Health Insurance
These days, health insurance can be an important part of child support. Very often, a parent's employer provides medical insurance for the entire family through a group insurance plan. There's no reason the kids can't stay on the same plan they've been on during the marriage if that's what you and your spouse agree to. If the parent whose plan it is must pay for the insurance, the other parent may have to kick in something toward the cost, or factor the cost into the child support calculations. Make sure that your settlement agreement also addresses the issue of who will pay for uninsured medical expensesif it doesn't, the parent with primary custody may end up getting stuck with those expenses.
Most parents are glad to maintain kids on their health insurance plans, and there's generally no problem with the employer in doing so-after all, divorce doesn't make any difference in the parent child relationship between the employee and the kids. But occasionally, an employer will balk at covering kids who aren't living with the employee parent, and of course it's always possible your spouse could flake out on paying insurance premiums or providing you with insurance information.
Anytime children are insured by a noncustodial parent, the custodial parent should secure the employer's obligation to continue coverage and the parent's right to get information from the employer and the insurer, with a Qualified Medical Child Support Order (QMCSO) from the court. And if you decide not to get an order, make sure your settlement agreement says you have the right to do so later if you choose to. If you have a lawyer, the lawyer will prepare the order. It's also possible that the company itself has a form that you can use. If not, you should be able to prepare it yourself using the summary plan description from your spouse's group health care plan. You can get the summary plan description by writing to the plan administrator, whose contact information should be included in whatever documents