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Did your ex or someone else claim your child on their taxes without your permission?
You've been taking care of your child, and now, when you try to claim them on your tax return, you're met with a rejection message. It's a situation that can leave any parent feeling helpless. Whether it's out of spite, greed, or an honest mistake, it's essential to know what steps to take when someone else claims your child as a dependent on their taxes.
In this guide, we'll walk you through everything you need to do to claim your qualifying child as your dependent on your tax return, even if someone else has already improperly claimed them.
The Race to File
In most cases, the custodial parent holds the right to claim the child as their qualifying dependent.
But there's a dirty little trick: the race to file. Timing is everything, and being the first to file electronically can make all the difference.
Sometimes, the non-custodial parent may try to improperly claim the child by filing their tax return first, preventing the other parent from filing electronically. This means that whoever files first and has listed the child as their qualifying dependent has claimed the child, and the second filer will receive a reject message from the IRS if they also have the child listed as their qualifying dependent on their tax return.
But here's the crucial point: having an IRS-accepted return with a dependent DOES NOT confirm that the taxpayer is qualified to claim that dependent.
Understanding the IRS Criteria: Who is the Custodial Parent?
The IRS doesn't rely on legal documents to define the custodial parent; the IRS has its own definition of the custodial parent (unless you were legally divorced or separated between 1985 and 2008). The IRS defines the custodial parent as the one who had the child with them for most nights during the year, regardless of any joint legal custody agreement or Mediated Settlement Agreement. Since there are 365 days in a year, one parent will typically have had the child spend more nights with them than the other. Let's break it down, night by night.
• Each night the child sleeps at either parent's home or is in their company, such as during vacations, counts as the child having lived with that parent according to the IRS.
What About Overnight Camps or Sleepovers?
These nights are generally allocated to the parent who would have had the child during those nights.
What About the Last Day of the Year (December 31st)?
The night of December 31st is considered part of that year, not the following year.
Tie-breaker Rules: What If Both Parents Claim the Qualifying Child Because the Child Lives with Both Equally?
When the child has spent an equal number of nights at the home of each parent, the IRS applies a tie-breaker test and will grant the qualifying child to a taxpayer in the following order:
The parent who is the child's biological or adoptive parent gets priority.
If both parents have equal claim and they are not married, the parent with the higher Adjusted Gross Income (AGI) gets to claim the child on their tax return.
The IRS may require verification of residency to determine which parent is entitled to claim the child.
What if the parents were never married?
All the same rules would apply as long as they lived apart for the last six months of the year.
Do You Have a "Qualifying Child" for a Dependency Exemption?
Before claiming your child as a dependent, let’s make sure your child meets the 5 tests – Relationship, Age, Residence, Support and Joint Return – as defined by the IRS to be your Qualifying Child:
Relationship Test:
The qualifying child must be a son/daughter, sister/brother, stepchild, half brother/sister, adopted child, foster child or a descendant of any of them such as a nephew/niece or a grandchild.
A foster child has to be placed with the taxpayer by an authorized agency.
Age Test:
The child must be under age 19 by the end of the calendar year, OR
Under age 24 if he or she is a full-time student, AND
Younger than you (and your spouse if your filing a joint return), OR
Totally and permanently disabled at anytime during the year regardless of their age.
Residence Test:
The child must have lived* with the taxpayer at least half of the year.
The IRS counts nights spent at the taxpayer's house when determining whether the test is met.
*There are exceptions for temporary absences, kidnapped children and children who died within the same year they were born.
Support Test:
The child must NOT have provided more than half of their own support for the year.
Funds received from TANF, SNAP and WIC are counted as parent-provided support.
Scholarship money does not count as dependent provided support.
Joint Return Test:
Child cannot have filed a joint return for the year.
Exception: Joint return was filed with spouse in order to get refund on tax withheld or estimated tax paid.
*Filing to get any credit fails this test!
If you meet ALL the requirements above, than you are considered the Custodial Parent eligible to claim the child as your Qualifying Child unless the tie-breaker rules apply OR you willingly signed IRS Form 8332 releasing to claim the child in question for the designated tax year(s) to the Non-Custodial Parent.
What to Do If Your Return Is Rejected and You’re Entitled to Claim the Child:
Step 1: Confirm that the non-custodial parent claimed the child on their tax return and this isn't an identity theft situation.
Step 2: If the non-custodial parent claimed your qualifying child, file a paper return by mail and keep proof of mailing.
TAX PRO TIP: Paper file with your proof of custody documentation! To possibly shorten or skip Step 3, send your supporting documents, as listed in IRS Form 886-H-DEP, along with your paper tax return.
Step 3: After about 6 weeks (or whenever the IRS can get to it), the IRS will review both returns and may audit one or both taxpayers. You (and possibly the other parent) will be asked to provide supporting documentation proving custody.
If the IRS has already processed the non-custodial parent’s return, the IRS should still review the custodial parent’s tax return and will allow whichever parent meets the Qualifying Child test.
If the child is determined to not have met the Qualifying Child test for the non-custodial parent who claimed the child on their tax return, the IRS will request the non-custodial parent to return the part of their tax refund or any credits applied that was applied to their return due to the Qualifying Child exemption.
Be prepared for this process to take some time, typically 8-12 weeks or more depending on what the current processing times are for the IRS.
TAX PRO TIP: Consider getting an Identity Protection PIN (IP PIN) for yourself and your children if you’re the Custodial Parent. This six-digit number prevents others from e-filing tax returns using any Social Security number or Individual Taxpayer Identification Number (ITIN). The IP PIN is known only to you and the IRS.
Your child belongs with you – both in your home and on your tax return. Don't let anyone wrongfully claim what is rightfully yours. And remember, even if all these steps fail to resolve the issue, you have the opportunity to take the matter to Tax Court before the IRS officially denies your claim for dependents.
If you're still unsure or need professional assistance from a knowledgeable Tax Professional, don't hesitate to reach out.
Your child's well-being and your tax benefits are worth the effort!
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied upon for, legal, tax or accounting advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal, tax or accounting advisor.
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