In order to claim a dependent child on your federal return, the IRS requires your child to have lived with you for six months or more during the tax year. In the case of divorced parents, this residency test ensures that only one parent can claim the child each tax year. In the case of a noncustodial parent claiming a child on their taxes without permission, you or your spouse may be required to file an amended return.
If a noncustodial parent claims a child on their taxes when they are not suppose to, both parties may be audited. The noncustodial parent is also at risk for paying additional taxes.
IRS Rules for Claiming a Dependent Child
If your ex-spouse claimed your child on their taxes without permission, you are both at greater risk of being audited by the IRS since the same child appears as a dependent on two different returns. Your ex-spouse has up to three years from the filing of the original return to file an amended return and pay any additional taxes. However, it’s possible that your child didn’t live with either of you for long enough and your ex-spouse may actually be qualified to claim the dependency. For example, a child may have lived with grandparents or attended boarding school for several months during the year. When neither parent qualifies as being the custodial parent, you and your spouse need to work out who will claim the child or use the IRS rule that the parent with the highest adjusted gross income is allowed to claim the child.
Exception Using Form 8332
A custodial parent can agree not to claim the child and allow the non-custodial to do so instead. In this case, the qualified parent can sign IRS Form 8332 or an acceptable facsimile to grant permission to transfer the right to claim the child to the other parent. Some parents who have joint custody of a child use Form 8332 to trade off the tax years when each claims the child.
2018 Tax Law
Prior to the Tax Cuts and Jobs Act, which went into effect starting in the 2018 tax year, a qualifying dependent child could be claimed for a personal exemption, as well as for a tax credit. The new law eliminated the personal exemption but retained the child tax credit. IRS rules previously used to determine if you could claim your child for an exemption are still used to qualify for the child tax credit. In 2018, you can claim up to a $2,000 credit for each qualifying child who is under the age of 17. The credit phases out for taxpayers with adjusted gross incomes above $200,000 (or $400,000 for married filing jointly).
2017 Tax Law
If you are filing late returns for the 2017 tax year, be aware that you or your spouse can claim a personal exemption for a qualifying child as well as a tax credit. The 2017 child tax credit allows up to $1,000 per qualifying child and phased out for adjusted gross incomes greater than $75,000 (or $110,000 for married filing jointly).
- H&R Block: The New Child Tax Credit
- Intuit TurboTax: What Happens When Both Parents Claim a Child on a Tax Return?
- IRS: About Publication 504, Divorced or Separated Individuals
- IRS: About Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent
- IRS: Divorced and Separated Parents