With The Advanced Child Tax Credit Payments That Have Been Issued In 2021, How Have They Been Divided Amongst Divorced Parents Or Parents That Are Not Together?
Unfortunately, it seems that these tax credits have not been carefully divided by the IRS. As a result, there are cases in which one parent may feel slighted because the other parent has received the full tax credit.
Often, tax exemptions are addressed in divorce settlement and custody arrangements that have been filed with the court. (Generally, only one parent claims the children as dependents.)
When it comes to Advanced Child Tax Credit payment, the amount received by the parents will be unequal if there is an odd number of children and the total number of credits cannot be split in half. Unfortunately, the IRS does not currently have a system detailed enough to consider this issue.
For parents worried about an unfair division of the Advanced Child Tax Credit payments, it is essential to speak with the other parent and try to agree on how to disburse these funds fairly.
You may choose to be creative and use the money to buy something for your child, put it in a trust for their college education, or cover expenses for activities the child participates in.
Because there is currently no legal structure for this problem, it is most beneficial to seek a resolution with your child’s parent on your own accord.
Is There Any Advice You Would Give To Couples Who Are Divorcing And Is That Something That They Should Settle At The Time Of The Divorce As To Who And How They’re Going To Do The Claiming Of Children?
Suppose that a divorcing couple has two (or any even number of) children. It is best for one parent to claim one child and the other parent to claim the second child in these cases.
If there are three (or any odd number) of children, it is often best for parents to alternate the years they will claim that child (or children) as dependents.
This becomes complex when there is, for example, only one child and the parents have not agreed to an alternating pattern. In these situations, it is common for parents to race to file their taxes first and see who will get the exemption. Additionally, there are forms that the IRS will use to consider whether an exemption is taken correctly, and they may reverse decisions they have made about tax credits.
Because of this, it is always the best situation for parents if they can come to an agreement about how they will file beforehand.
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