Court Ordered Exemptions and the IRS

Gavel On Sounding Block

 

I have to start with the disclaimer first: I’m an enrolled agent, I’m licensed by the Department of Treasury to represent persons before the IRS. I am not an attorney. According to the rules of my license, I am not allowed to give legal advice. But I get to talk about taxes until I’m blue in the face!

Why the disclaimer? Because if you’re a divorced parent, you may have to deal with a court order that outlines who can claim your child’s tax exemption. But the IRS has its own rules about who may claim a child’s exemption, and sometimes the courts and the IRS don’t agree.

Here are the IRS rules:

  • If your divorce decree went into effect after 1984 and before 2009, the noncustodial parent may be able to attach certain pages from the decree to the tax return to claim the exemption as long as the decree has no conditions (like paying child support) instead of requiring the custodial parent to sign a form 8332 (release of exemption).
  • If the divorce decree or separation agreement is after 2008, then the custodial parent must sign a form 8332 for the noncustodial parent to claim an exemption.

Can see how this can be tricky? If you don’t sign the 8332 form , and your ex doesn’t have the proper divorce decree documents, then your ex doesn’t get the exemption as far as the IRS is concerned. You’re going to win this one on the IRS battlefield. You may have to take it to the battlefield, but if you do then you will win.

But what does a person do when there’s a court order for her spouse to claim the exemption on the children, but the husband has no right to claim the children as far as the IRS rules are concerned? What do you do if a local judge says, “You’ve got to let your ex husband claim your children for taxes? I order you to sign the 8332 form.”

I spoke with a local attorney about what could happen to a person who followed the strict IRS rules and claimed the children’s exemptions for herself when the divorce decree allowed the spouse to claim – the answer I got was to have the person call her attorney. You see, the IRS rules are all about how the IRS will settle the issue. I’m an expert at how the IRS will settle the issue. But if you’re dealing with a court order, and if your ex decides to take you back to court to enforce the exemption rule, and you defy a court order to allow him to claim the exemption, then it’s quite possible for you to see the inside of a jail cell. I don’t want anybody reading this blog to wind up in prison. So even though you should win a tax case, you should really talk to your attorney before you go against your divorce or custody decree. Make sure that you’re within your rights in your jurisdiction.

If you are the custodial parent and you are required to let your ex claim your children, remember that the exemption only includes the exemption and the child tax credit. As the custodial parent, you keep the Head of Household designation, the Earned Income Tax Credit (if you qualify), and the Child Care Credit (if that’s relevant.) See my post about splitting a child’s exemption:  Split Exemptions

If your ex claimed your child and shouldn’t have, read my post, “My Ex Claimed My Kid” for tips on how to fight back:  My Ex Claimed My Kid

Divorce is tough on everyone. It’s really tricky when you’ve got federal and state rules that don’t always mesh together either. The bottom line is that the IRS does not want to be involved in domestic disputes. If your divorce decree says that the Dad will pay child support and claim the exemption while Mom has the custody, then the IRS does not want to get involved in whether or not Dad paid that child support. That’s why the IRS rules are the way they are. Basically, they’re kicking that issue back to the local jurisdictions. If Dad wants Mom to sign the 8332, then his child support should be paid up to date. If Dad’s done everything right and Mom is still refusing to sign the 8332, then the IRS is saying it’s not their problem – Dad can go back to court and work it out from there-locally.

We used to have a saying when I was a kid: “Don’t make it a federal issue.” I don’t remember where we got it from, probably some TV show. I just remember we just always used to say it. But that’s kind of what the IRS is saying to divorced couples claiming their kids today, “Don’t make it a federal issue.”

If you’ve got a situation where the IRS rules and the court rules don’t line up, do consult your attorney about how your situation can, will, or should be handled.

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Here are some links that might help

EIC questions of any kind:  EITC Help

How to find free tax preparers:  Free Tax Help

How to find your local IRS office:  Contact Local IRS Office

 

426 thoughts on “Court Ordered Exemptions and the IRS

  1. Hi Alyssa,
    Your fiance can claim the exemption and the child tax credit, but his ex can still claim the head of household filing status and the EIC for the child – if she qualifies. Maybe, if she knew that she could still claim the EIC she’d not be so angry. Here’s a post that might help: Split Exemptions

  2. Hi Jan,
    Your ex should be able to claim the exemption and the child tax credit as per the divorce decree, but you get to keep the Head of household filing status, the earned income tax credit, and the child care credit. Personally, I recommend not violating your court order, but the IRS is only concerned with where the children live. This post might help you: Split Exemption

  3. My ex and I have a court order (since 2011) stating that we alternate claiming our daughter. This is the first time I was audited, and never used the 8332 before. We don’t communicate and I’m certain she will not sign the form. Would the IRS accept the court order stating this is my year to claim her?

  4. Hi my fiance has court papers signed by the judge and both lawyers stating he is suppose to claim his son for tax purposes and his ex is suppose to claim his daughter for tax purposes. She’s claimed both kids the last three years and this year is the first time he’s actually been able to claim his son without being red flagged. Ex is furious and says it’s illegal for her to let him claim them since she has more overnights. She says she is going to take the actions necessary.
    She herself has never once filed for the children it is her now husband who filed. My real question is if she goes to have hers amended or whatever she feels she needs to do so they stop his return to amend hers or would the just adjust his return for next year? He will be taking her to court for in contempt.

  5. Hi my divorce stipulation says the Defendant will be entitled to claim the child as an income deduction and receive any applicable tax credits on behalf of the child every other year. My accountant says the tax laws override this? I’m the custodial parent and the child did not stay one night at his father’s. Can I use my child then?

  6. Hi Phoenix,
    Only the custodial parent may claim the child care credit. People mess that up all the time. Paper file your return, it will get straightened out. I would only claim what you actually paid since it’s well over the amount you can claim anyway.

    And I figure there are probably plenty of reasons to get mad at your ex. But this one could quite easily be an honest mistake.

  7. Hi, I am the custodial parent of two children age 3 and 8. My ex husband and I have a court-ordered agreement that he could claim both children last year and this year and after that each of us claims 1 child each year. Last year I claimed dependent care and filed HOH. I sent the 8332 forms to the IRS to allow him to claim them. This year, my return was just rejected because “someone else” has claimed the children for dependent care on their taxes. The IRS informed me to send in a paper return with proof that I am the custodial parent and they will make sure I get the credit and deal with him accordingly. My questions are: He has been ordered by the court to pay half of daycare although I paid $1,000 more than he did last year. 1. Do I list only the amount that I paid in daycare fees on my taxes, or can I list the entire amount paid between the two of us? I don’t know if it will make a big difference because of the credit limit of $600 per child. I paid over $7000. 2. By me submitting a paper return with proof does that automatically initiate an audit process? I asked him if he claimed them. He refuses to respond to me so at this point I have no other choice. I have not submitted the 8332 forms yet and I think I will wait to submit them until this is cleared up. Thank you!

  8. Hi Jacqueline,
    You tried to send him the 8332. You did your part. And – if he owes back child support – if he has a refund coming on his taxes, the IRS would take his refund to pay the child support. So, you’re right, if he doesn’t file – you don’t get his refund.

    This is what I would do – I would file your return the way you are supposed to – not claiming the exemption and the child tax credit. Do claim head of household and EIC because you are still entitled to it. Then, after you’ve gotten your refund – and maybe wait until after April 15th – I would file an amended return claiming your child’s exemption and child tax credit. In the explanation in the 1040X, I would say “claiming child’s exemption and the child tax credit as the non-custodial parent chose not to claim him.”

    Why do it this way? It covers your backside. If your ex is claiming the exemption – you filed a proper return and the amended return will be rejected. If your ex didn’t claim the exemption – you’re out his refund money – so you should claim what’s yours. And by spelling it out on the 1040X – you’re being completely open and transparent about what you’re doing and why.

  9. Hi Justin,
    You should be able to e-file your return. You just need to have the 8332 available to mail in if the IRS asks for it. What software are you using? Why don’t you try the one on my website: Do Your Own Taxes You can try it for free. Maybe you’ll get the answer you need there.

  10. Hi Jenn,
    Ahem. I’m not a lawyer, but it seems to me that just paying this month’s child support does not qualify as being “current.”

    But, since I’m not a lawyer, lets talk about IRS stuff. A divorce decree that has conditions won’t hold up with the IRS. You would have to issue your ex a form 8332 for him to be able to claim the kids – so, you would be fine claiming them yourself (as far as the IRS is concerned.)

  11. HI, I have a court order saying my child’s father claim one of my children. However, I’m not in contact with him. I’m willing to sign the 8332 form allowing him to get whatever credits, but I get no response back from him. Should I still file the 8332 form with my taxes? I think he maybe trying to evade paying back child support. Meaning if he doesn’t claim the child then I won’t get his tax return? Is that an accurate statement?

  12. I am filling out my taxes and when I say Im the non custodial parent it requires me to get form 8332 filled out and I have that but it wont let me see what my amount is of my return when claiming my child why? How will I know how much of a return I am to receive? And why can’t I just e-file form 8332 with my tax return why does it have to be mailed?

  13. If in our decree it stated the non custodial parent can claim the kid for even years if he is caught up on his child support obligation. He has never claimed the kid the other 8 years and paid support very sporadically, but this year he wants to. However he still owes me $17,987.27 but he paid this months child support. I think I should just keep filing and claiming her and work it out if the IRS asks me anything. Does that sound right?

  14. Hi Kay,
    If you ex claims your girls in even years and you claim the boys in odd years – well who claims the boys in even years? Sorry – I just got confused there.

    To answer your real question, if your ex says that he can’t claim your girls this year – and he’s giving the exemption back to you. Have him put it in writing for you He doesn’t need to sign an 8332 for you – because you’re the custodial parent. But you should have him write you some type of note just to keep in your files.

    As long as your husband doesn’t try to claim the girls – you won’t get in trouble with the IRS for this.

  15. Hello, I’m a custodial mother of 4 children and my divorce decree states that my ex claims our 2 daughters beginning in 2016 for even years and I claim our 2 boys beginning in 2017 for odd years, can I claim our 2 daughters since he mentioned that he may not claim them for tax year 2016, if so, do I need a form or statement from him? My ex is a retired disable veteran and does not work. plus, he remarried last year to a woman with 5 children. I don’t want to get in trouble with the IRS so any information would be greatly appreciated.

    Thank you,
    Kay

  16. Hi James,
    Remember, you ex doesn’t get to claim the Head of Household filing status or EIC. Make sure you at least claim that! Now, technically, if your ex wants to claim the kids, you are supposed to give her a form 8332. It seems to me that you shouldn’t sign that form until she pays the child support she owes. Just sayin’.
    Of course, I can’t give legal advice, I’m not a lawyer. I was just thinking out loud.

  17. Hey my name is James I got all the kids courts said mother has to pay 50% and she can claim 2 of our kids she aint paid not 1 cent im a single farther doing my best it’s like the courts take her side she works makes 900 a wk bring home 700 something she claims the kids and don’t deserve to

  18. Hi Corina,
    I’m not sure I understand your question.

    Did you try to file your 1040 return and it got rejected? That would imply that your ex already filed and claimed the kids for HH and EIC. If that’s the case, then you need to paper file.

    Or, did you try to file the 8832? You can’t file that for him, you can only print it out, sign it, and give it to him.

    But, looking at the date you posted this – the IRS isn’t accepting efiled returns yet. So it’s possible that the reject is because the IRS e-file isn’t open yet. (It’s late this year.)

    I hope that answers your question.

  19. Hi Dan,
    I’m guessing that your ex has custody of both children. That means you may only claim the exemption – and child tax credit, of your son. You do not get to claim him for head of household or EIC. Maybe if you ex understood that, she’d be more cooperative.

    If not- well then you could go to court. (I’m not an attorney, I’m deferring to your lawyer here.) Or, you can always try filing first and see what she does. She might just quit if her tax return gets rejected.

    Remember though, don’t claim more than you are entitled too – then you don’t have a chance. Yes, you really need the 8332 to win the case with the IRS, but if you two wind up in court – it sounds like you’ve got a court document allowing you to claim your son. The question becomes, how much fight does she have in her when she’s wrong?

  20. I am the custodial parent. I qualify for EIC and the child care credit. I have offered to file a 8832 for for my ex husband so he can get the excemption. I tried to file and they rejected it? How do I file without it being rejected?

  21. I have a court order that says I get my son for tax purposes. There are no contingencies on the order if I pay child support or not I paid 7000 to one state and then I was on disablity but now she refuses to sign the 8332 and the last 2 years have claimed my son and says she will do it again this year . Also she claims our daughter the court order agreement is that she gets our daughter and I get our son the judge told me I can sue her for damages. Kinda lost at what I should do or my rights she is making a federal case out of nothing

  22. Hi Sandra,
    So girlfriend talk-okay? There is a court order – so you don’t want to get in trouble with the court. But – the court order only allows her to claim the exemption. That gives her the exemption, and the child tax credit. If your income is low enough, your boyfriend could still qualify for EIC with the second child. That helps a lot.

    Now – it might be worth your while to talk to the ex about claiming the exemption and child tax credit also. Now I’m doubting that she’ll say yes, but if she’s all for doing what’s right for the child – and the money will be spent on the child – well maybe she’ll go for it. (Okay, yeah, if this is really girlfriend talk – I don’t believe that either, I just had to say it. Every so often, good people do the right thing so we need to keep those options open.)

  23. Hi Lamonica,
    If you don’t have a court agreement stating who will claim the exemption, then the person who should claim the exemption is the person your child lives with. As you may already know – “should” and “do” don’t always go together. If you are entitled to claim your child, then do so. If he claims her (or him) and your return gets rejected, here’s a post for you: My Ex Claimed My Kid

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