Your husband can claim your children as dependents when filing his tax returns under specific circumstances, even if you’re separated or divorced. It’s best that the two of you coordinate this situation to make sure your tax returns aren’t denied or the approval isn’t delayed, which can result in penalties and a larger tax bill.
Everything depends on whether or not you were married, separated or divorced during the tax year in question, if the children qualify as dependents and who has head of household status. Reviewing how these rules work will help you get your tax filings correct.
Biological Children or Stepchildren Qualify
Your husband can claim your children by another person (his stepchildren) if they meet certain requirements regarding such things as the support timeline, your children’s ages, whether there’s a disability, the child's student status and the amount of your husband’s financial support.
If you divorce your husband and your children are no longer his stepchildren, as long as he supported them during part of the year for which he is filing his taxes, your children can qualify as his dependents. Is a stepchild a legal dependent? Yes, if they meet the IRS's criteria.
You can find out more about the qualifications for a child dependent and what is considered a stepchild for tax purposes on the IRS website, but you should talk to a tax professional to make sure your child qualifies as a dependent.
Your Filing Status
You and your husband need to decide your filing status, and whether you will file as single, married filing separately, married filing jointly or head of household. What is the difference in filing married jointly and married separately?
These distinctions will affect whether and how you can claim children as dependents, and it will have an effect on your deductions, tax credits and tax rate. For example, your filing status affects the amount of your standard deduction.
Can Both Parents Claim Children?
If you’re filing as married filing jointly, you both claim your children as dependents, but the two of you are considered one filer. Joint filers usually enjoy the lowest tax rate and highest standard deduction, as well as qualifying for other tax credits.
To claim head of household so that you can claim one or more children as dependents, you must be unmarried and meet certain other criteria to claim a child as a deduction. Only one parent can claim a specific child as a dependent when filing as head of household, and only one unmarried parent can claim head of household related to that child.
For example, if the two of you are not married and each pays 50 percent of your son Bobby’s expenses, neither of you can claim head of household – you must pay more than 50 percent of a dependent’s expenses.
On the other hand, you can both claim head of household if you are not married, your husband pays more than 50 percent of your son Bobby’s expenses and you pay more than 50 percent of another child’s expenses. You can even live under the same roof while this is occurring, as long as you’re not married.
If the IRS challenges your head of household status, you might need to fill out Form 886-H-HOH. You will need to read and fill out the form and possibly provide supporting documents when you submit it. It's also a good idea to meet with a tax advisor for any questions about married filing jointly with stepchildren or similar situations.
Steve Milano has written more than 1,000 pieces of personal finance and frugal living articles for dozens of websites, including Motley Fool, Zacks, Bankrate, Quickbooks, SmartyCents, Knew Money, Don't Waste Your Money and Credit Card Ideas, as well as his own websites.