child benefit/tax credit payments

I'm filling out a new child benefit application and will do out tax credit application as well this month after baby's birth. I understand there are US tax implications if the benefits/credits are put in my name, but does it matter if we put them in DH's (who's British) name, but then we still pay them into my account? I handle the family finances and all the bills come out of my account, so it's really where we need the money. If we need to keep them in DH's account for US taxes, I'll have to set up some kind of monthly transfer, which will be a pain.

Surely there's someone who can say if there are implications if we put the tax credits and child benefit in my British husband's name but then pay them into my account. I was hoping to complete the application today.

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I would have thought that it's only an issue if the money causes you to go above FBAR reporting thresholds or taxable interest.

That shouldn't be a problem. So unless I hear otherwise, we will put them in DH's name, but deposit it into my account.

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So...
1. Your NRA spouse is making gifts to you. You file Form 3520 if he gifts you over $100,000 in any year.
2. You file FBARs if you meet the filing threshold
3. You file form 8938 if you meet the filing thresholds
4. Because you are holding a foreign currency, IRC § 988(e)(2) requires foreign currency gains attributable to personal transactions to be recognized if in excess of $200, while any losses on such transactions are disallowed as non-business losses under § 165(c)).
5. The gifts are not income so will not help you claim refundable child credits in the US.
6. Your husband should be able to claim the normal expediture out of income exemption for UK IHT purposes.

And presumably this would be the case whether the money comes in directly or by bank transfer, correct guya?
Your safest bet might be to keep the money in your husband's account and change some of your bill paying to come from there.

I get so overwhelmed and confused with all of this. I don't get tax language at all, but sounds as if you are saying that I could be held liable for any gifts over 200.

What if we have a joint account? Obviously, if it goes over 10K we file fbars and such, but does it create concerns for me if we both put income some income into a joint account as a couple and both pay household bills from that account?

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Guya (or others) any thoughts, in language a tax clueless person can understand, on a joint account? Would I be penalised for having a joint account with my husband?

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Option 1: Pay a tax adviser big bucks for the super secret advice

Option 2: Just do it. One day a large black Suburban with a crack team of IRS operatives will come up the Welsh valleys to claim their well-deserved slice of your UK government benefit checks (although probably not).

I believe that with a joint account the gift thing would not be an issue, as you would be co-owners of the account. You would then have to worry about FBAR and all that stuff.

So...
1. Your NRA spouse is making gifts to you. You file Form 3520 if he gifts you over $100,000 in any year.

Given the level of UK child benefit I don't see this being an issue if this if your only gift.

2. You file FBARs if you meet the filing threshold
3. You file form 8938 if you meet the filing thresholds

Only an issue related to the child benefit if they take you over the thresholds.

4. Because you are holding a foreign currency, IRC § 988(e)(2) requires foreign currency gains attributable to personal transactions to be recognized if in excess of $200, while any losses on such transactions are disallowed as non-business losses under § 165(c)).

Only an issue if the exchange rates give you a $200 gain over the tax year.

5. The gifts are not income so will not help you claim refundable child credits in the US.
6. Your husband should be able to claim the normal expediture out of income exemption for UK IHT purposes.

I bet you weren't even considering any of these two possibilities so I wouldn't worry about them.

So, I only see #4 as a real annoyance and to avoid all complications just get your NRA spouse to claim the UK benefits and spend them.

I believe that with a joint account the gift thing would not be an issue, as you would be co-owners of the account.

Precisely