Jackson Hewitt(R) Weekly 'Tax Time Tip': How Single Parents Can Claim Child-Related Tax Benefits

Jan 29, 2010, 09:00 ET from Jackson Hewitt Tax Service Inc.

PARSIPPANY, N.J., Jan. 29 /PRNewswire-FirstCall/ -- Whether a single parent to a toddler or a teen, there are often significant tax benefits available to those who can claim dependents.  Jackson Hewitt Tax Service® reminds single parents to get smart about the child-related tax credits and deductions they may be able to claim on an annual tax return – and how to assess if they are eligible to claim these.

This Week's Tip:  Single taxpayers who claim a child as a dependent can obtain many child-related tax credits and can deduct several costs related to providing for a child, such as those covering education and child care.  Knowing which tax benefits exist – and understanding what determines who is allowed to claim a child based on tax law – may help single Moms or Dads receive more money back on a 2009 tax return.

"For parents who are divorced or separated, it's important to remember that only one parent is allowed to claim a child on a tax return as a dependent," said Mark Steber, chief tax officer, Jackson Hewitt Tax Service Inc.  "Usually it is the 'custodial parent'– the parent the child lived with for the greater number of nights during the year, though the custodial parent can allow the non-custodial parent to claim the child if certain conditions are met.  However, if the child lived with each parent for an equal number of nights during the year, the parent with the higher adjusted gross income becomes the custodial parent."

Many single taxpayers with dependent children may file as Head of Household, provided that the following conditions are met:

  • You are unmarried or "considered unmarried" on the last day of the year
  • You paid more than half the cost of keeping up a home for the year
  • You had a "qualifying dependent" living with you in your home for more than half the year  

The Head of Household tax rate is usually lower than that of those filing as single or married filing separately, and the standard deduction is also higher by choosing this status.

Because the IRS considers marriage status based on the last day of the tax year, taxpayers who are separated or in the process of getting divorced may still be able to file as Head of Household even if the divorce is not yet final as of midnight on December 31.  In order to be "considered unmarried," both spouses must have lived apart in separate households for the last six months of the year and must not file a joint tax return this year.  

Custodial parents may also claim a range of credits, including the Earned Income Tax Credit, Child and Dependent Care Credit, Education Credit, and deduct the child's medical expenses they paid when they are the custodial parent of a qualifying child.  Non-custodial parents who claim the child may claim the Child Tax and Additional Child Tax Credit and can deduct the child's medical expenses they paid.  More information about these and other tax considerations can be found in the Jackson Hewitt Online Resource Center.

"Finally, it is important to note that non-custodial parents cannot claim the Head of Household status, the Earned Income Tax Credit or the Child and Dependent Care Credit," added Steber.

A knowledgeable tax preparer can help single parents determine how their individual situation affects their 2009 tax returns and can assist them in ensuring they claim all of the child-related deductions and credits that are available. For more information and tips, consult the Jackson Hewitt Web site at www.jacksonhewitt.com

About Jackson Hewitt Tax Service Inc.

Jackson Hewitt Tax Service Inc. (NYSE: JTX), with more than 6,000 franchised and company-owned offices throughout the United States, is an industry leader providing full service individual federal and state income tax return preparation. Most offices are independently owned and operated. Jackson Hewitt is based in Parsippany, New Jersey. More information may be obtained at www.jacksonhewitt.com. To locate the Jackson Hewitt Tax Service® office nearest to you, call 1-800-234-1040.


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SOURCE Jackson Hewitt Tax Service Inc.