(2021) Splitting Child Care Expenses in 50-50 Divorce with 2 Children

[datanner]

Hello TurboTax Team and Community!

How can this scenario be treated in the online software for 2021 related to Child Care Expenses and input correctly: 

Parents are divorced, with joint 50-50 custody and split all expenses for 2 children 50% as per a separation agreement.

A single dependent is claimed by each parent and split evenly:

Parent A claims Child 1

Parent B claims Child 2

Child 1 based on their age max deduction for Child Care is $5,000 in 2021 (down from $8,000 in 2020)

Child 2 based on their age max deduction for Child Care is $8,000 in 2021 

The combined Child Care Expenses for which both parents contributed equally is $13,000, and split evenly is $6,500. 

$6,500 cannot be claimed by Parent A for Child 1 because it is greater than $5,000.

Any advice to make this even split? 

[simerjb]

If parents are separated and share custody, they can each claim part of the childcare costs they actually paid. Receipts should be issued to both parents for their individual percentage paid by the childcare provider.

Please Note: In most cases, childcare expenses are claimed by the parent with the lower net income. If the parents are separated and share custody, they can each claim part of the child care costs that they paid.

The following CRA information explains in greater detail the circumstances of childcare and shared custody (Sec 1.34) and how to handle "reimbursements" between parents (Sec 1.35). Child Care Expense Deduction

For more information, you can also refer to our TurboTax article T778 Tax Form: Child Care Expenses Deduction

Thank you for choosing TurboTax.

[datanner]

Thanks so much for the help! The issue I am having is within the software. 

As soon as Parent A claims just Child A (whose max is $5,000 for care expenses based on their age) as a dependent, you cannot input any amount greater than $5,000.

But Parent A in fact paid $6,500 in total when considering total care receipts for their 2 children (of which only 1 is being claimed as to not double count).

Last year's taxes were filed via an accounting firm, and I am trying to do it myself this year for us both. This is the only part I am stumbling on. 

[Grace12345]

Hello

I am wondering if you were able to solve this. I am on the same boat.

Is there a way to edit how much each parent claims on the software?

[datanner]

Was able to figure out today!

Trick was to indicate ALL children on the initial dependents form.

Then there is a later step to check off which expenses you want to claim for each. There you would ensure you don’t claim the same children more than once across parent  for the basic dependent amount (was 13k or so for me for one child). I checked the basic amount for Child A on my filing, and she B. 

Then because you indicated more than one child on the initial form, the max child care expense is corrected based on total children you input and you can select each of them by name and state the related child care expense. We were able to then correctly split day care/camp fees in half this way. 

Hope this helps!