Discussion:Divorced Parent and Higher Education Deduction
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Discussion Forum Index --> Tax Questions --> Divorced Parent and Higher Education Deduction
| 4 March 2007 | |
| Hi all --
I have a newly divorced client. Per the divorce decree, her ex gets to claim the children as dependents, however both parents are equally liable for tuition costs. I don't think that my client will be allowed any credit for the tuition she has paid, since she is not eligible to claim her cjhild as a dependent. Any thoughts on that? Thanks, Allan | |
| 5 March 2007 | |
| Must be able to claim the children/or child as dependent(s) on the return in order to claim tuition credit. | |
| 5 March 2007 | |
| The divorce decree has no effect on the dependency exemption for children who have attained the age of majority. The Tax Court has ruled that the Form 8332 (or divorce decree equivalent) does not apply to children who are adults under state law since an adult-child is never in the custody of anyone (unless he is in jail). If the age of majority is 18 in your state, then a college student would most often be over the age of majority. Thus, a 19-year old full-time student would be the QC of the parent who he lived with for more than one-half the year, regardless of what the divorce decree says, and that parent may not release that exemption to the other parent. If the child lived with neither parent during the year, then the child would be the QR of the parent who provided more than one-half of his support (assuming that the child earned less than $3,300). | |
| March 5, 2007 | |
| All of the tuition is claimed or deducted on the return where the dependent is claimed as an exemption. It doesn't matter who is liable for the tuition costs or who actually paid the tuition expense. | |
| 5 March 2007 | |
| Well, if the child is the dependent of her ex, her ex will get the Hope or Lifetime Learning credit for her payments. | |
| 12 January 2008 | |
| Riley-
I'm personally in a similar situation, where the divorce decree stipulates that my ex gets the exemption for my older daughter (now 19 yrs old) and I get the exemption of my younger daughter (18 yrs old). However, there was nothing in our decree about education costs, so I am the only one paying anything. For 2007, I paid about $5,000 to the university for my 19-year-old daughter. The way I've read the rules on Hope & Lifetime Learning, either my daughter would claim the credit and not be anyone's dependent or my ex would claim the credit, even though she hasn't paid a dime. Is that the same as what you are saying, or has the Court set a precedent that opens a little leeway? Thanks | |
| 12 January 2008 | |
| I believe that as long as the child qualifies to be a dependent on another's return, that dependent may not claim the credit | |
Death&Taxes (talk|edits) said: | 12 January 2008 |
| This is one reason to invite the tax professionals into post-divorce planning when the parties are negotiating. Naturally if the payer is going to get the credit [maybe because Form 8332 is filed, or the exemption switches sides at a later date], the other side is going to want a pro quid pro in return. Or for that matter, if the tuition payer's income will be too great to have any tax benefit, something should be negotiated to cut costs in another area. | |
| 13 January 2008 | |
| Agree with D&T. This area of the law is complex -- even for a tax professional. Once a child has attained the age of majority, he is not in the custody of either parent and the divorce decree becomes completely irrelevant in determining who is entitled to the dependency exemption. | |
