Turbo Tax do not allow Divorced Parents with Joint Custody to Claim Child Care correcly

[kenneth-nunez-l]

Childcare expenses are claimed by the parent with the lower income and must have been paid in order to allow the parent to work or go to school. When parents are separated, however, the parent living with the child can claim this amount regardless of their income. If the child lived with both parents at different times in the year, as in the case of a joint custody, both parents can claim childcare expenses for the period when the child lived with them. Turbo Tax interface do not cover well Child Care for Joint Custody. Always ask for Higher income Spose or common in law regardless if you already configured as Divorced

[TurboTaxKim · Accepted solution]

When parents are separated and share custody, they can each claim the part of the child care costs that they paid.You must enter your dependants on your own tax return, but take care not to claim any credits or deductions the other parent may be claiming or entitled to.

As long as you are not filing your tax return with another spouse/commonlaw partner on December 31st, you just enter the amount of Childcare Expenses you actually paid while the child was in your care. The higher/lower net income rule will not apply to you.

More information is found in this CRA publication (Sections 1:33 -1:36): https://bit.ly/2uAIYyo

[kenneth-nunez-l]

Thanks Kim. The issue is that Turbo Tax interface do not make this scenario intuitive  as even when the tool knows that you are separated/divorced, turbo tax keeps asking the user if your spouse (that you have none) has higher/lower income to be able to claim Child Care Expenses that makes it confusing to the user when each parent is allowed to claim their part in Joint scenarios 🙂

[TurboTaxKim]

Thanks for the feedback on this. I've taken note and will pass it on to our developers.

[c-vandesype]

I have also tried to claim my child care expense (I too am divorced).  Despite following all the directions, (I agree with PP that it is NOT intuitive) they fail to appear and my deduction is still zero.  

[TurboTaxKim]

@c.vandesype When you enter your dependant information, you must say "yes" to the question "Did this dependant live with you". You are only allowed to claim the childcare expenses that were incurred for the time the child "lived" with you. Please let us know if you are claiming the expenses this way and if it works or not.

[c-vandesype]

Still nothing.  Is there some way to refresh?  Should I start over with a blank return?

[pcollins3]

In the year of separation, there are more options that the parents can use. It is best if they are in agreement on how they wish to claim child care and dependent(s). 

[cciraco82]

This seems to be an ongoing issue, which I also entered into my feedback comments this year. I was advised by an accountant and divorce lawyer that the best way to account for joint custody is to alternate years claiming your dependant. To be specific, you don't actually enter your dependant on the form for the alternating years. At least, this is based on what my separation agreement states, that we will claim on alternating years. I find this offensive because I have a child and why can't the program figure out the appropriate costs? It was a nightmare dealing with the CRA in previous years before we figured out this method.

[Jenn_rose]

In a case where one of the divorced couples remarries.... How does one file the return with the divorced parent claiming their own child on their return and not adding it to the "New Spouse's" return simply because they are the lower income?  I have been on the phone with CRA and they said that the Child should NOT be on the "New Spouse's" return unless the other parent is deceased (which they are not)!  Each way that I try to use Turbo tax it does not allow me to apply the dependent to the divorced parent because they are the higher income.   How can I fix this?