Can a Father Claim a Child on Their Taxes if the Child Does Not Live With Him?
When parents divorce or separate, determining who gets to claim the child as a dependent on their taxes can become complicated. The IRS has clear rules regarding which parent may claim the child, but this is an area of frequent confusion, disputes, and audits. As a non-custodial parent, you may be wondering if you can claim your child on your Minnesota taxes after a divorce.
While the custodial parent generally gets tax benefits like the child tax credit and dependent exemptions, the non-custodial parent may still be able to claim the child under certain circumstances. Let’s break down what the IRS requires, Minnesota state laws, and what step-fathers can take to claim a child as a dependent if the child does not live with him.
Who Typically Claims a Child?
In most cases, the custodial parent, or the parent the child lived with for the greater number of nights during the year, claims the child as a dependent. However, the non-custodial parent may still be able to claim the child under certain conditions, which we’ll explain shortly.
What are the IRS Rules on Claiming Dependents?
According to IRS Publication 504, claiming a dependent allows you to claim certain tax benefits, including exemptions, child tax credits, head of household filing status, and earned income tax credits. To claim someone as your dependent, IRS rules require:
- The dependent is your qualifying child or qualifying relative.
- The dependent meets certain requirements, like income thresholds.
- You provided over half of the dependent’s financial support.
- The dependent lived with you for over half the year.
However, when divorced or unmarried parents each claim the same dependent, the IRS has tiebreaker rules to determine who claims the child.
How Do Divorced Parents Claim a Child?
For children of divorced or separated parents, the parent who had custody of the child for more nights during the tax year is usually entitled to claim them as a dependent. This is known as the custodial parent.
The custodial parent must fill out IRS Form 8332, releasing their right to claim the child if they want the non-custodial parent to claim the child instead. Without the release form, the IRS will typically deny the non-custodial parent’s tax return if both try claiming the child.
If parents have joint custody and the child spends equal time with both, the parent with the higher adjusted gross income can claim the child.
Can a Non-Custodial Parent Claim a Child on Their Taxes?
Typically, the custodial parent is the only parent who can claim the child as a dependent. However, there are some scenarios where the non-custodial parent may still be able to claim the child:
The Parents File a Joint Tax Return
If the divorced parents file a joint tax return together, they can both claim the child. When filing jointly, it does not matter which parent is custodial or non-custodial.
The Custodial Parent Releases Their Claim
The non-custodial parent can claim the child if the custodial parent signs IRS Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent. This form allows the custodial parent to release their right to claim the child that tax year.
The non-custodial parent must attach Form 8332 to their tax return. This form is only valid for one tax year, so the custodial parent would need to sign a new form each year they agree to release the exemption.
Parenting Time Meets IRS Thresholds
If the non-custodial parent had the child for a certain amount of time during the tax year, they may still be eligible to claim the child as a qualifying dependent. The child must have lived with the non-custodial parent for more than half the year to meet the qualifying child test.
If the child lived with each divorced parent for half of the tax year, IRS tiebreaker rules apply that consider which parent had the higher adjusted gross income.
What Happens If Both Parents Try to Claim the Child?
When both divorced parents claim the same dependent child, it can trigger an IRS audit. The IRS will look at each return to determine who truly qualifies as the custodial parent. The non-custodial return will likely get rejected.
To avoid any issues, communicate with the other parent ahead of tax time. Agree on who will claim the child and have the custodial parent sign Form 8332 if needed. Get your agreement on claiming dependents added to your divorce decree.
Amending the First Tax Return
If the first return claiming the child was filed by the incorrect parent, amending that return to remove the child does not mean the second return will now be accepted.
Even after amending, the IRS will not accept an e-filed return with a dependent that’s already been claimed that tax year. The second parent would have to mail in a paper return instead.
What Happens Next With the IRS?
When both parents claim the child, the IRS will send notices to both taxpayers. They will have to provide evidence on why they believe they are legally entitled to claim the child.
The IRS will then decide which parent gets to claim the child based on their eligibility rules. Typically, they side with the custodial parent unless Form 8332 was provided or the non-custodial parent met the threshold for shared parenting time.
If parents continue to claim the child illegally, it could result in fines or loss of tax benefits in future years.
Who Gets To Claim the Child on Taxes After Divorce?
Claiming child dependents after divorce must follow the IRS rules below:
The Parent Who Had Physical Custody of the Majority of the Nights
As mentioned, the custodial parent is based on where the child sleeps. The parent who had the child the greater number of nights gets to claim them.
A calendar tracking the overnight stays with each parent should be kept as evidence in case of an IRS audit.
The Parent Who Earned More Income
If the number of overnights with each parent was equal, the parent with the highest adjusted gross income could claim the child. Again, evidence of income should be retained.
The Parent Who Files First
All else being equal, the first parent to e-file their return with the child listed as a dependent will have their claim accepted. The second e-file will be rejected unless the first return is amended.
The Parent Who Has Form 8332
If the custodial parent signs Form 8332, releasing their right to claim the child for that tax year, the non-custodial parent can legally claim the child. The form must be attached to their tax return.
Tips for Divorced Parents Claiming a Child
Follow these tips when claiming children on taxes after a divorce:
- Communicate in advance – Both parents should discuss tax planning before filing season to determine who will claim the child. Having an agreement avoids IRS issues.
- Understand the rules – Be clear on qualifying time thresholds and who the IRS considers the custodial parent when counting overnights.
- Switch off annually – If sharing the tax benefits, custodial parents can sign Form 8332 for alternating tax years.
- Retain your proof – Keep a calendar tracking overnights and records showing income in case of an IRS audit.
- File first – For non-custodial parents with Form 8332, file your taxes early in the season before the custodial parent.
- Mail a paper return – If your e-file is rejected because the child is claimed twice, mail a paper tax return instead.
- Respond to IRS letters – If both parents claim the child, respond to the IRS providing your evidence on why you qualify to claim the child.
- Amend returns – If you erroneously claimed a child, file an amended return to fix the error and avoid penalties.
Claiming Children on Taxes After Divorce With a Minnesota Family Law Attorney
The rules around claiming dependents can be complicated for divorced and separated parents. Situations involving joint custody or a nearly equal split of overnights can present unique issues.
If you are unsure whether you qualify to claim your child living apart from you in Minnesota, consult with an experienced divorce lawyer. They can review your decree, custody arrangement, and IRS compliance to ensure you do not lose out on tax benefits you may be entitled to.
At Martine Law, our seasoned Minneapolis family law attorneys provide guidance on divorce taxation matters. We help fathers understand when they are eligible to claim children as dependents when not living with them full-time. Schedule a consultation if you need clarity on IRS rules for claiming kids after divorce in Minnesota.