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Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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My husband and I are closing on a home in 2 weeks. We qualify

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My husband and I are closing on a home in 2 weeks. We qualify for the 8000.00 tax credit. We file separate returns because my husbands taxes get put towards child support. The downpayment was a gift from my mother. I am the primary on the loan and he is the co borrower. If his name is XXXXX XXXXX on the deed will I be able to claim the full 8000.00, or is there another way to do it for me to claim the full 8000.00 instead of 4000.00 on each person's return
Submitted: 8 years ago.
Category: Tax
Expert:  Merlo replied 8 years ago.
Hello jack,

If you are married and you file separate returns, the maximum amount of credit that either of you can claim is $4,000. Please refer to the instructions for the Form 5405, page 3, under the paragraph entitled "Amount of the Credit".

Even though your husband may have an offset on his refunds due to chid support that he owes, it would still be to your advantage to go ahead and file for the credit on his behalf. The amount would be used to reduce any child support he owes, but at least that will help to reduce his outstanding balance. If he amount he owes for child support is less than $4,000, then he would receive a refund for the excess portion not used to offset that debt.

If this was helpful please press the Accept button. Positive feedback is also appreciated.

Thank you jack.

Customer: replied 8 years ago.

Thank you for your prompt answer, however my concern being is if he is not on the deed then he is not considered an owner, therefore he would not be able to claim the 4000.00 on his, so should I not in turn be able to claim the additional 4000.00 on mine
Expert:  Merlo replied 8 years ago.
Hello again jack,

You are correct in the fact that if he is not listed as an owner, then he cannot claim his share of the credit. However, at the same time you would not be allowed to claim the entire $8,000 credit, even though your name is XXXXX XXXXX one on the deed, based on the fact that you are filing separate returns.

When you are married and you file for this credit, the most that either spouse can claim when filing a separate return is $4,000, regardless of how the deed is titled. The only way that you would be able to file for the entire $8,000 credit is by filing a joint return, in which case the end result would be the same, as they would withhold your husband's share to pay his child support.

The law may very well have been written in this manner just exactly because of situations like yours where one spouse has an offset to satisfy. The IRS is sure to close any loophole that would allow a taxpayer with an offset to get around that by having his or her spouse file for the entire credit.

The only possible way that you would have around this is if you had a totally different person listed with you on the deed as a co-owner who also qualified for this credit. Perhaps your mother or a brother or someone you could list as a joint owner, and have them file for the other half of the credit. Of course under the law, that person is also required to be an occupant of the home, so even in that case you are limited to what you can do here.

But unfortunately, that would be the only way that you could claim any more than $4,000.

If this was helpful please press the Accept button. Positive feedback is also appreciated.

Thank you jack.

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