Claiming Children on Taxes After Divorce

August 18, 2017 | Bill Henry

Frustrated mom trying to file taxes

Accidentally or not, an ex-spouse who claims your child(ren) on their tax returns (when they shouldn’t) can cause legal problems for both parents. The IRS doesn’t allow for a dependent to be split in half and claimed by more than one person. The IRS uses a computer system to screen social security numbers for duplicant dependent claims. If found, they will send a warning/audit letter to the second tax return that was filed using the dependent’s Social Security number.

If you have received an audit letter from the IRS, or suspect that your ex-spouse may be wrongfully claiming your dependent, then read on to discover what the IRS rules are and possible solutions.

Warning: if this problem is not addressed, then the IRS may seek financial and punitive measures against you. It’s best to deal with IRS problems swiftly, before they snowball.

Who should claim the children?

The IRS has clear standards in regard to which parent gets to claim the children following a divorce. The IRS defines the qualifying parent as the parent who is the custodial parent. A parent can claim that child, so long as:

  • The child is 19 or younger, or, if a full-time student, under the age of 24.
  • The child must live with you for more than half the year.
  • The child must receive at least 50 percent of their financial support from you.

If you have joint custody, then the qualifying parent would be the one who has the child the most. Example: If Jane has the child for 176 nights and Jon has the child for 174 nights, then Jane would be considered the qualifying parent and can claim the child as a dependent on her tax return.

Alternative arrangements

There are circumstances where parents may take turns claiming a child on their tax return, or if more than one child exists, each parent may claim a child. The circumstances that would allow for this could be dictated in:

A divorce decree. Sometimes a divorce decree will take into account the parent’s differences in income and may award the noncustodial parent the ability to claim a child.

A marital agreement. Sometime parent’s agree to either alternate years and take turns claiming the child on their tax returns; or they may also 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 8832 to the IRS, notifying the Department that they are waiving their rights to dependency.

For some couples, this is a good option to continue to promote a good working relationship between both spouses. While a divorce decree, once enacted, 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-spouse could change their mind, leaving you in the lurch.

Legal Tip: Modification can only be sought when there is considerable change in either parent’s financial status. It is important to note that this change must be “continuing” 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, etc. 

How to deal with an ex-spouse who is wrongfully claiming your child

1. Talk it out. If both spouses feel safe enough to have a discussion, then amiable solutions are usually the best first option, for both your sake and the sake of any children involved. Maybe your ex misunderstood or made a mistake. Maybe you can both come to a new and better agreement. Let them know of the mistake and come to an agreement on how to fix it, such as having your ex send back a corrected tax return to the IRS. If there is a history of domestic abuse, then talking it out may put either spouse at risk – in such an instance a person should seek legal advice.

2. Take Action. If your ex is unwilling or unable to fix their mistake, then it is on you to remedy the problem. An individual can do this by being open and communicative with the IRS. If you have received an IRS notification, then send back evidence showing that you are the proper custodial parent. IRS Form 886-H-DEP lists the acceptable supporting documents and details how to submit these documents to the IRS.

If the IRS rules against you, then you can still appeal the decision. Since IRS appeals can be difficult to navigate in terms of meeting deadlines and abiding by other rules, it’s recommended that you contact a tax attorney. Our Colorado Springs, Castle Rock and Denver tax attorneys can answer your questions and help you seek a speedy resolution. Please schedule an assessment with one of our tax attorneys today.

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