Claiming Your Children on Taxes After Divorce

December 7, 2022 | Cierra Garso

Single or remarried mothers and fathers who wrongly claim a child on their taxes cause legal problems for both parents. It makes no difference to the Internal Revenue Service whether it was an accident or deliberate falsehood. Once the IRS catches two adults separately claiming the same children as dependents, they will flag the second tax return and send a warning or audit letter. If you’ve received such a letter, or suspect the other parent is claiming your children on taxes after divorce when they shouldn’t, this legal guide explains the laws and your possible solutions.

Bottom Line:

If your former partner has wrongfully claimed the children as dependents on their tax return, you can file a motion to enforce the divorce decree or separation agreement and get the dependent credits you are owed.

 

In this Article:

Who Can Claim the Children?

From the IRS’s perspective, the custodial parent — the parent with whom the child lives for at least 50 percent of the year — is the parent who claims the child as a dependent on their taxes. The IRS has clear conditions a parent must meet before they qualify to claim a child:

  • the child is 19 or younger or is a full-time student and younger than 24 
  • the child has lived with that parent for more than half of the tax year
  • the child receives at least 50 percent of their financial support from the parent claiming them

Internal Revenue Service 

What if the Parents Share Joint Custody?

When parents have joint custody of the child (or children), the one whose house the child sleeps at the most nights is the qualifying parent.

For example, if Jane had the child at her house, or under her supervision, for 190 nights and Kyle had the child for 175 nights, Jane would be considered the qualifying parent who can claim the dependent on her taxes.

Tiebreaker: If each parent had the child for the same number of nights over the past tax year — say, 180 nights each — then the custodial parent is the one with the higher adjusted gross income.

Can the Non-Custodial Parent Ever Claim the Child as a Dependent? 

They can, but only with the consent of the custodial parent, and only after completing the following steps.

Step One: Get it in Writing 

The custodial parent must fill out IRS Form 8332 (Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent) which states they do not intend to claim the child as a dependent on their upcoming tax return.

This release allows the non-custodial parent to claim the child tax credit, additional child tax credit, and credit for other dependents, if applicable, for the child. If an IRS Form 8332 is not available, a written statement for the same purpose could suffice if it includes all the necessary information that the Form 8332 would have.

Step Two: Attach the Form 8332 

The non-custodial parent must attach a copy of the form 8332 or written statement to his or her tax return each year the custodial parent releases his or her claims. The release can be for:

  • one year, or
  • for a number of specified years (for example, alternate years), or
  • for all future years, as specified in the declaration.

Alternative Arrangements

Some families just compromise differently. Parents may decide to take turns claiming a child on their tax returns. For example, one parent claims the child in odd-numbered years, and one claims them in even-numbered years. Or …

If they have two children, they may decide that each parent claims a child every year. The situation can become trickier if the parents have an odd number of children, say, three or five. An attorney can help you determine what is the best legal option for you in these situations. 

Of course, these decisions cannot be made haphazardly, and they shouldn’t be made outside of the legal process. Compromises like these should be dictated in:

A divorce decree. Sometimes a divorce decree will take into account the parents’ differences in income and award the noncustodial parent the ability to claim a child on their tax returns.

A marital agreement. Sometimes parents agree to either alternate years and take turns claiming the child on their tax returns; or they can decide to each claim a child, if more than one dependent is present. If the parents decide to take turns, then the custodial parent will need to submit form 8332 to the IRS, notifying the Department that they are waiving their rights to dependency.

A Peaceful Path

Making alternative arrangements isn’t going to be the right solution for every circumstance, but it is one way to promote a good working relationship between two parents who are either divorced or never were married.

While a divorce decree can only be altered by submitting a modification with the district court, a couple may also come to a new agreement. If they do, it’s important to seek the help of an attorney to make sure the agreement is legally binding. Otherwise, your ex could change their mind, leaving you with no way to enforce the new arrangement.

Legal Tip: A divorce decree cannot be modified for only tax purposes. Modification can only be sought when there is considerable change in either parent’s financial status, but these adjustments can affect who can claim dependents on their tax return. It is important to note that this change must be “continuing” and not temporary. Such changes can include:

  • job loss,
  • higher living expenses,
  • emancipation of a child,
  • change in health insurance,
  • remarriage,
  • change in alimony payments,
  • change in daycare costs,
  • … and more 

How to Handle the Other Parent Wrongfully Claiming Your Child

First, you should be reasonably sure that it really was the other parent who claimed the child on their tax return. The IRS is prohibited by privacy laws from revealing the identity of the other person claiming your dependent. They will only send a CP87A Notice to let you know someone else has claimed them.

Unless you have cause to suspect fraud by anyone else, the person wrongfully claiming your dependents is the other parent. Once you have enough reason to suspect them, it’s best to address the issue promptly. Here are two ways to do it:

One: Talk it Out

Amicable solutions are usually the best first option, as long as it’s possible to work it out. Maybe your ex made an honest mistake. Perhaps this is an opportunity to work out a better agreement. Let the other parent know about the mistake and come to an agreement on how to fix it.

You might need to convince your ex to send back a corrected tax return to the IRS. This is easier if your relationship with the other parent is on firm ground. However, if there is hostility or a certain level of mistrust between the two of you, it is best to seek remedial action through the court. This is especially true if there has been a history of domestic abuse which could put either of you at risk.

Legal tip: While you might have better luck talking face to face with the other parent, make sure to also let them know of your concerns via text message and/or email. This way, you have documentary proof that you are not an accessory to the tax fraud.

Two: Get Straight with the IRS 

If the other parent is unwilling or unable to fix their mistake, or worse, if you’re not sure who is claiming your dependent, then you must set the record straight with the IRS. If you have received a CP87A notification from the IRS, send back documented evidence showing that you are the legal custodial parent. IRS Form 886-H-DEP lists the acceptable supporting documents along with instructions on how to submit them to the IRS.

If the IRS won’t accept the evidence you’ve presented, you can still appeal their decision. However, at this point it’s best that you contact a tax attorney, since IRS appeals can be tricky to navigate in terms of meeting deadlines and keeping up with other rules.

Three: Pursue Enforcement through the Court 

Any divorce decree or custody case ruling is a court order. Unless the court has explicitly stated otherwise, the custodial parent is the one who has the right to claim the children as dependents on their tax returns. When the other parent violates this order by claiming the dependents for themself, it’s the same as failing to pay child support or other breach. You have the right to ask the court to enforce its original order.

Remedial Contempt 

You can seek a remedial contempt of court charge. Any parent found in violation of a divorce decree or custody ruling can be held in contempt, and ordered to remedy their behavior immediately. 

For example, the court can order the other parent to file a new, corrected tax return, and/or to reimburse you your court and attorney’s fees. 

Punitive Contempt 

A punitive contempt of court charge is meant to punish the offender for flagrant, or repeated breaches of its orders. A punitive contempt charge can result in fines and jail time.

We Can Help If Your Ex Wrongfully Claimed The Children on Their Tax Return 

One parent mistakenly or dishonestly claiming a child as their dependent might seem like a small problem at first. Here’s the thing: small problems with the IRS grow into bigger problems if they go unaddressed. It’s best to nip it in the bud, and our tax attorneys have the experience to step in and bring the matter under control. If you’re looking for that peace of mind, call (303) 688-0944 for your free case assessment.

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