Divorce is always hard, but divorce with children is exponentially more so, particularly regarding taxes, including Child Tax Credit.
One of the most contentious aspects of paying taxes after a divorce is the children.
Your eligibility for tax credits and deductions like the one for children or for higher education costs will change depending on your filing status.
Divorced taxpayers must be single as of December 31st, 2022, in order to qualify for the special tax treatment afforded to divorcees.
How To Claim Child Tax Credit?
Unless you were legally separated or divorced by December 31, you and your spouse will need to file your taxes as married filing jointly or married filing separately this year.
To be eligible for the Child Tax Credit in 2022, a parent must have a dependent kid who will still be under the age of 17 in that year. Divorced parents can only list their children as dependents on one of their tax returns. It is illegal for parents to divide up the tax benefits their children receive.
The term “custodial parent” refers to the parent who can legally claim a child as a dependent. Unless otherwise specified in a divorce decree or court order, the custodial parent is considered to be the parent with whom the kid spent the majority of the calendar year.
If both parents share equal custody of a child, the parent with the greater AGI will be considered the custodial parent for tax purposes.
The Child Tax Credit is available to both parents after a divorce, and the parents can agree to share it equally or take turns claiming it in their divorce decree or settlement agreement.
Filing Form 8832 by the custodial parent every other year is the simplest way to share the Child Tax Credit (CTC). By filling out this form, the noncustodial parent can receive the CTC and supplementary CTC without having to file a dependency exemption for the kid.
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Increasing CTC
In addition, President Biden proposes increasing the CTC from $2,000 to $3,000 for children aged 6 and older, and from $3,600 to $4,800 for children aged 6 and younger, in the budget that was announced on Thursday.
As part of pandemic alleviation, in 2021, parents received a larger CTC, although, despite attempts by Democrats, that credit has already expired.
The plan includes funding for free preschool for all children in the United States. It also proposes a 12-week paid family leave policy. Budgeted defense spending amounts to $885 billion.
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