Splitting an exemption is not illegal if you follow the proper rules. Learn how here.
Sometimes when I’m working with a divorced couple, it seems that the most beneficial way to prepare the tax return is to split the exemption for their child. When I say that, they always tell me, “But I heard that was against the law!” No—that’s not exactly true. But let me tell you, there is a right way and a wrong way to do it. If you follow the rules and do it correctly, it’s not only legal, it’s the right thing to do. Warning: if you don’t follow the rules, you could be breaking the law. I give a lot of advice to do-it-yourselfers, but if you’re planning to split an exemption, I recommend you go to a professional for it. (And if she tells you it can’t be done—hire somebody who knows what she’s talking about.)
With most divorced couples (I’m including here couples who were never married but have split apart and have lived apart for at least 6 months of the past tax year), one parent (usually the mother) has custody and the other parent (usually the father) has visitation rights. A lot of couples say that they have “joint” custody – for example, the kids stay with the dad every Wednesday night and every other weekend and with the mom the rest of the time. If you count the days, under IRS rules, the mother wins on the custody status. According to the IRS, wherever the child spends the most nights is where the child lives—if you’ve got one of those every other weekend and every Wednesday night agreements, the IRS doesn’t count that as being equal.
In my example, I’m saying the child lives with the mother. In IRS lingo, the mother in this example is the “custodial” parent and the father is the “non-custodial” parent.
In this case, the mom has all the power—she’s the custodial parent. The mom can claim all the benefits of having a child on the tax return. Those benefits include:
- Head of Household filing status-a lower tax rate
- Childcare tax credit-credit for money you spend on daycare
- Childcare exclusion-so you don’t get taxed if your company pays for daycare
- Earned Income Credit-this can be worth up to $3,094 for one child
- Exemption for the child-a deduction of $3,600 off your income
- Child Tax Credit-worth up to $1,000
When tax professionals tell you that you can’t split exemptions, what they’re reading is the section of Pub. 17 (that’s like our Bible for tax stuff) that says these things always go to the same person. What they’re not reading is page 31—the part that tells you about the special rules for divorced or separated parents. Under the special rules section, it says that the mom (our custodial parent) can release the exemption for the child to the father (the non-custodial parent). This lets him claim the exemption and the child tax credit on his return, while the mom keeps the head of household status, the dependent care credit, and the EIC on her return.
Why would anyone want to do this? Lots of reasons! Number one, of course, is to maximize the amount of money you get back from the government. A lot of times, after a divorce, the mom doesn’t have a very high taxable income. Remember, child support isn’t taxable. The dad has lost a lot of his deductions so his tax bill could be pretty high. He’d probably never qualify for an earned income credit anyway, but the $1000 child tax credit would really help him out. If the mom’s taxable income is really low, she wouldn’t even qualify for the $1000 child tax credit. In some cases she could give it away without it hurting her at all. Or maybe the father is behind on child support, she could negotiate: if he catches up on the child support by December 31st, she’ll sign the form to allow the father to claim the child’s exemption. Remember, when claiming the exemption for a child, the custodial parent has all the power. If the dad claims the child without permission, the mom can just file her own return fully claiming the child and sending the dad’s return to the IRS audit division. You don’t want that to happen.
Splitting an exemption isn’t the best choice for everybody. You have to look at both returns and see if it’s going to work. It also helps to be on good terms with the ex—this certainly doesn’t work well with people who are fighting.
There are a lot of other rules that I haven’t even touched. (That Pub. 17 book is 295 pages long!) But if you are divorced or separated, you need to know that splitting an exemption might be an option for you to use on your income tax return.
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Here are some links that might help:
EIC questions of any kind: EITC Assistant
How to find free tax preparers: Free Tax Help
How to find your local IRS office: Find an IRS Office
Hi Jan if my ex-boyfriend claimed my daughter this year and he let me know but isnt giving me any money can I have him audited? I claimed her last year and didnt give him any money for it although I lived in his home the whole year before we seperated. I said I would give him money but I never did and this year I need some money. He has her four days out of the week, what can I do about it, we never spoke about this in mediation either.
my boyfriend and his ex were married and have a divorce decree and he only gets his son every other weekend for right now until he goes to court for split custody. he filed his son on his taxes recently and i asked him if he was sure she hadnt filed him already and he said they had an agreement that he’d file him on his taxes.So he gets an irs letter saying he owes them money and now they want proof of his head of household and bills showing he has been head of household in year 2011 which is when she and him had an disagreement on their child. So he called her and she denied any agreement and that she did in fact file their son without his knowledge. i know your going to say she has every right but why not let the father know bc id understand then but he has no proof but her word that she did say it was an agreement. so what is he facing now that he’s in this situation bc he’s a great father and didnt know his babys mother already filed them without him knowing?
Hi Jan, A followup question to my earlier one on the other blog. My income is too much to take advantage of the Child Tax Credit but I do not phase out for the exemption. My ex-wife on the other had has a very low income so the tax credit would help her out. I am the primary parent as our children live with me about 95% of the time. Can I use all of the exemptions while she uses the tax credits? It would save us combined quite a bit of money. In fact she would benefit from the entire $3,000 worth of credit for our 3 children. While the exemption would lower my taxable income by $3,800 per child.
Hi Jim,
I agree. They system is broken. Sadly, I don’t know how to fix it.
I was wondering if I could claim My expenses for driving to pick up my son every other weekend. He lives over two and a half hours away, and I drive further then his dad, needless to say it is very expensive in gas. I am self employed and already have to claim my mileage. Don’t get me wrong I am not trying to do something illegal at all. That is not my intention. I was just wondering if there was some kind of right off for excessive expense for visitation? I know child support considers it when deciding how much you will pay. I want to thank you so much in advance for taking the time to answer my question.
The thing that is missed is that I need permission from my ex-wife. When the court gives one person the authority and strips it from the parent, the court has told that person that they can behave to their so liking. I even have other women defending myself and my daughter. When one parent pays support to another, the payer should be able to benefit from a taxable stand point. Yes, children benefit but the tax system is in need of change.
Selina,
The custodial parent holds all the cards. The non-custodial parent may only claim an exemption if the custodial parent allows it or it’s decreed by the courts. Generally the custodial parent signs a form 8332. It is illegal for a non-custodial parent to claim EIC. Just thought you should let your friend know that.
Hi Alex,
You may be able to claim EIC, but if you have a fight she will win. What you want to do is work together with the mother to see what works best for the three of you. If she’s willing to cooperate, then together you can do what’s best for your child. But if you fight, she wins.
Hi James,
You’re not going to like my answer: apologize. Grovel. Beg.
I told you you’d hate it.
Now, you actually have a little bargaining power–she didn’t really live apart from you for the full 6 months–but could you actually prove it? She would have to file as married filing separately which would keep her from getting EIC. Did she even have any income?
Grovel.
Seriously, what is she gaining by filing separately? Figure that out. Beg to file jointly and then offer to pay her what she got by filing separately. I know–not what you want to hear, but that’s probably the easiest route.
Now, you could fight it with the IRS–but since the kids were with her longer–she wins.
So here’s the big question–have you been shady with any of your financial dealings? Because if you have, if she has a smart accountant–she won’t file with you and she shouldn’t. If you’ve always been straight with the IRS, you might have a chance.
Hello, I have a friend that has a daughter and is divorced from the mother. (the mother is NOT re-married) The mother does NOT work and my friend pays for his daughters FULL exspences. His child lives with him 4 1/2 months out of the year. My question is…..Does he automaticlly have the right to claim his daughter for taxes since the ex wife doesn’t work, and he IS the sole financial provider for his daughter? The Ex wife charges him every year to let him claim his daugther even though he pays a large monthly child support and he also buys his daugther what she needs (like heath coverage, back to school clothes and supplies, birthday parties, xmas presents, pays for sports activities etc.) If he would not claim his daughter his ex wife couldn’t either because she doesn’t file a tax return. So I’m thinking she would let someone else claim the daughter that is NOT legeally entitled to do so. Is there any way my friend can claim his daughter for taxes without making a deal with his Ex? (given that fact that she’s not filing her own taxes)
Hi Jan,
I don’t see my recent post so I will try again.
As of yesterday (2/6/2013) my wife and I are officially divorced. We have 3 children together and have been married 16 years. For the first 15 years she was a stay at home mom and just last year started working. I have been the breadwinner even after she started working. We separated in mid July of 2012. I was the primary supporter for those 7-1/2 months. After the separation, the kids stayed with her solely. I tried talking with her to file our taxes together but she refused and quickly filed her taxes without my knowledge, thus claiming all 3 kids.
What are my rights? We both should be able to claim them, but she beat me to it? Doesn’t seem fair to me at all.
Thanks!
Hi,, I have a ?
My daughters mother and i lived together 8 months of the year.. An i payed pretty much everything during that time, but the bills was in her name.. She was working under the table for 2 of those months.. then jobless.. Can i claim EIC?? My daughters mother has had my daughter most of the time since 8-11-12 when we split up.. We havent been to court yet, But i pay her $200 a month..
My wife and I are now divorced as of 2/6/2013.
We have 3 children under 18 and my wife and I separated in July 2012. The children lived with both of us under the same roof until mid-July. Since then, they lived with her. She quickly filed her taxes this year, claiming the children. She refused to file taxes with me even though I am the bread winner. What should I do?
Hi Carol Ane,
Your ex may try to claim your daughter, but he wouldn’t win the case with the IRS. If he does try, you fight back and paper file.
Okay QUESTION TO BE ANSWERED PLEASE… I HAVE A ONE YEAR OLD AND I WAS NEVER MARRIED TO THE FATHER NOR IS HE ON THE BIRTH CERTIFICATE. ALSO HER LAST NAME IS MY LAST NAME AND HE HAS ONLY VISITATIONS WITH HER AND PAYS CHILD SUPPORT OTHER THAN THAT SHE IS MAINLY WITH ME PRETTY MUcH ALL THE TIME HE SAYS NEXT YEAR HE IS CLIAMING MY DAUGHTER ON HIS TAXES BUT HOW IS THAT FAIR CONSIDERING IM ALWAYS THERE AND AM THE PRIMARY CARE GIVER SO MY QUESTION IS… CAN HE AT ANY GIVIN TIME CLIAM HER ON HIS TAXES WITHOUT MY PERMISSION OR CAN HE GET IN TROUBLE IVE BEEN TOLD HE CAN GET FINES AND GET IN TROUBLE FOR THIS?!?!!?
Hi Rex,
If your son lives with his grandmother, she has custody. She also claims the exemption. Splitting the exemption is only between parents.
HI, I have a 14 year old son, but he is living with his grandma (custodial party) WHO has the guardianship of him now. Am i qualified to claim my son as an exemption for my tax return to get child tax credit or EIC?? Or i have to get a signed paper or any filled form from his grandma to get the permission to claim him as exemption?? or can his grandma claim his as an exemption??
Hi Justine,
If your ex claims the kids it might flag the system, but since this would be the first time, probably not. If you file and get rejected–well then you know what he did and you’re going to have to paper file that return. Good luck.
Hi Lashae,
If you two are cool with each other, then go get your taxes done together and do what works out to be the best solution for both of you. Use the money to set up a savings account for your child.
In the future, because you are the main caregiver, you should claim EIC and head of household and child care credit. You may allow him to claim the exemption and Child tax credit for one or both children if you chose (or if you have a court order.)
Because you lived together for half of the year, he could claim EIC for the kids if his income is low enough. But if you fought over it, you’d win. But since you get along–you can work together and do what’s best for the children.
Hi Mere,
Okay–let’s say it’s your turn to claim your kid but you’re not going to file. You could allow your ex to claim, even though it isn’t her year, if you both agree to it. There’s always the 8332 form to the non-custodial parent, or just writing something out for the custodial parent.
That said–I see a lot of people fighting about that later. LOTS OF PEOPLE FIGHTING ABOUT THAT LATER. So think about that before you play games. Get things in writing. And use the money for the child.
Hey Penny,
Technically, you should get the exemption even though your daughter moved out because that’s what’s in the written agreement. Your ex will get to claim EIC for her (if he qualifies).
Now my guess is that he’s going to try to claim the exemption too, but that’s not what your court document says. But, technically you should receive an 8332 from him for you to claim her.
My guess is that you’re going to get stuck fighting this in court. Good luck.
Hi Kelley Michael,
If you are the father of the children–then yes you could claim 2 and she claim one. If you’re not the father, then you wouldn’t be able to claim EIC on the kids so it would change things.
I’m assuming that you two are both the parents of all three children. In that case, it makes sense to run a few scenarios–claim 3 and 0, 2 and 1, 1 and 2 — you get what I mean, right. Do whatever gives you the biggest joint refund and spend the extra money on the kids.
Whichever one of you makes the most money should claim head of household and the one with the lower income should claim single.
Hi Kristy,
It’s against the law to claim EIC for a child that you don’t live with. A visit on Sundays does not make a person a custodial parent. You’re in the right. Why? Because it’s the law.
Here’s a link to the EITC assistant on the IRS website. If your grandchild’s father were to answer the questions honestly, he’s see that he’s not entitled to EIC.
Thanks! I’m worried he is going to try to! Do you know if something like that would flag the system?
BTW…
Last year I somehow put them both on my return stating that 1 lived with me full time and 1 part time (6 months). Ive never heard of that but it went through and he did the same but they questioned him. And somehow i still got a small credit for that. Im afraid to do it again because i dont want to get audited but was that correct or even possible?
Thank you for your time and any information you can give me on this matter.
Hi,
I have 2 children by a man. We split up in mid 2012 and have always carried 1 dependent during the year for our taxes. We are pretty cool about everything and he normally gets the kids every 4 days unless something comes up and of course they are with me. I live alone and run my own household however he lives with his mom. There are no court orders for child support or custody, we just work it out. He always makes more money than me and im trying to find the best way to maximize my return. Of course i am the primary caregiver of them both but trying to be fair i said he can carry one while i carry the other. Is it best that i just take EIC for them both and he gets the dependency and CTC? Or should we just each carry one? I am really trying to be fair about this tax thing with him but i feel like I do most of the caregiving and work anyway. Im a little confused as to how the dependecy tax and CTC work in peoples favors.
Okay I have a question if someone has joint custody and they have it in the papers she gets to file th kids on odd years he gets to on even years and since it is her year even if she isnt filling would he still not be able to file them on his taxes??
Hi, I have a delimma.My ex husband and I have been divorced for amost 3 years.It says in the parenting plan that I claim my daughter on taxes and he claims my son.We each do not pay child support and we pretty much split the costs. We have joint custody, I am primary over my daughter, he is primary over my son. My daughter turned 18 aug of 2012, she and I had had an argument prior to that, so she went to stay with her dad. However, I was still paying her lunch, school expenses, medical bills ect.my ex has went and claimed her on his taxes without consulting me at all.he said because she was resdiing with him for. Ore than 6 months, even tho we have a custody agreement saying I claim her and I was still paying her expenses that he can claim her.what do I do?
Hi Mary,
If he really has 50-50 and they split each child–then he can claim the child care credit for the child he claims only.
Hi Kris T–
I’m not a lawyer so I can’t tell you about Michigan law. But–for IRS purposes, you have custody of the children and you have the right to claim them on your tax return.
Now–your JOD gives him the right to claim one child–but he only gets the exemption–not EIC or the head of household filing status. Those rights belong to you.
Hey Justine,
I’m sorry but your ex is being sneaky. He’s trying to pay your back child support with the tax money that is rightfully yours to begin with.
Tell him NO DICE!
Besides–you’re right, he doesn’t qualify for EIC.
Hi, Your site is great! Just a quick question. My sons father currently has a lien on his taxes for child support, he keeps asking to claim our son for the greater refund. He says he was told he could claim EIC, which from your site I do not believe to be true. If he tries wouldn’t it look weird that he has a lien for child support but is trying to claim the child? Thanks for your help! The lien on his taxes is for back child support for my son.
Tricia,
It sounds like you win. You have the location and that’s the important part. The child is no longer a minor.
and she file single
would it be better for me to claim all three kids and girlfriend as dependants then?
Kati,
It will not be allowed. If you use the Form 8332, it only gives him the right to the exemption ($3,800) in 2012 and the Child Tax Credit. You still keep your head of household filing status, earned income credit, and dependent care expenses.
Hi i live with my girlfriend now for 3 years. We have 3 kids. Can i claim head of house hold and claim two kids while she files single and claims the 3rd? and get the credits?
My minor daughter and her six month old baby live with my husband and me. The baby’s father buys diapers, wipes and formula about 80% of the time but does not pay any other support and has never been to court here in Tennessee to legitimize the parentage of the baby. Legally, he has no rights to the baby but we welcome him anytime he comes to visit and even let the baby go to visit his family’s house on Sundays. My husband and I make good money and pay lots of taxes. The baby’s dad was told by his mother that he could claim the child and get the EIC and get back $3,000.00. He decided he wanted to buy a car with the money. When my husband and I found out that he intended to claim the baby, we confronted him. We assured him that it is not his place to claim the child but ours. He and his mother insist that we are wrong and evil for trying to take money away from him. We do not qualify for EIC but we did earn the deduction which I feel is our right. He and his family are very angry with us and our daughter and informed her that he will claim their son anyway and she won’t get a dime of it. We offered to give him $500.00 or the $1,500.00 we would get back for the deduction. He balked and said “No, why should I agree to that when I can get back $3,000.?” Who is correct and why? Thanks!!
Hi,
My son has shared 50 50 custody with 2 children. In the divorce agreement it states that each parent claims one child as an dependent – the same every year. My question is who can take the child care credit – each parent for only one child or the does the parent with the higher AGI claim child care expenses for both and if so is this only what he paid?
Thanks
Hi Jan,
Thank you for all your helpful responses.
MY JOD says for tax purposes we are to split our two minor (16 years) children every year until they are adults. However, last summer I took my ex back to court to amend the child support order as he was not taking them for his agreed upon times (we have 50/50 custody), they lived with him less than two months and the court referee found in my favor and raised support and asked him to try to make amends with his children to have them for more over nights (he took them for 2 overnights total after that). Now, even though the children lived with me for well more than most of the year he claims he is still going to claim one on his taxes this year. Is this legal in Michigan?
Thank you in advance for any insight you can provide in this matter.
Btw, the lien for child support is for our son.
Hi, Your site is great! Just a quick question. My sons father currently has a lien on his taxes for child support, he keeps asking to claim our son for the greater refund. He says he was told he could claim EIC, which from your site I do not believe to be true. If he tries wouldn’t it look weird that he has a lien for child support but is trying to claim the child? Thanks for your help!
Hi Jill,
Technically, you are not living together as you have two addresses.
Thank you…Here are some clarifications to your questions to see if we can claim her legally?
1. the parent that claims the exemption is the one that gets the college tax credit. There is no law about this, but really the parent that pays the tuition should be the one to claim the exemption–that would only be fair. But–that’s my opinion, that’s not the law.
*****Neither parent paid tuition. She has grants and scholarships that cover her expenses.
2. You say the daughter doesn’t live with her mother–but where does she live? If she’s at college, it still counts as her living with her parents–it’s an allowed abscence.
****She lives at college.
3. So–does your husband’s daughter live with you? Or is she living at college? Because that’s pretty much the key to what you can do.
*****She lives at college. Her address on her college documents is ours, her address on her fafsa is ours and her address on her dl is ours but she lives in an apt at college.
But their divorce document states that the mother gets to claim the “minor” child. She is no longer a minor child.
I signed the form 8332 and released the child exemption to my ex, however I am the custodial parent as he is with me for 7 months out of the year. My ex pays the daycare expense of about 3200 a year. I am head of household but do not pay for daycare. He plans on claiming the child care on his taxes, will this be allowed?
Hi Dana,
First and foremost–your safety and the safety of your child is more important. Don’t file with your ex–he sounds like a — well, mean person.
So, I’m guessing he filed a tax return and claimed both you and your child already. But I would be concerned if he’s done anything illegal financially.
I’d like for you to get some professional help. I realize that you don’t have any money but you can get free tax help. http://www.irs.gov/Individuals/Find-a-Location-for-Free-Tax-Prep
You have rights. Don’t let your ex railroad you.
I read in an earlier response that families who live together, even if they are not married, cannot split the exemption. I was wondering what the irs considers “living together”. What are unmarried parents who have always owned and/or rented seperately but stay most nights together in one or the others house considered? Our addresses and finances are different, but would splitting the exemption actually be cheating in our case? Thanks for your time.
Hi Lynn,
I’m back. Here’s the scoop–
1. You do not have to claim the exemption to claim the child tax credit.
2. Foster mom can claim all the EIC, head of household, the exemption and the child tax credit. That’s her right as the parent with the child for the longer period of time.
3. If she wants to: Foster mom may (does not have to) she may sign an 8332 form to allow you to claim the exemption and the child tax credit to you as the “non-custodial parent”.
Now–normally the 8332 is only for separated and divorced parents. But your situation is different so for you and her–because you are both parents a custodial and a non-custodial parent–you would be allowed to do that.
Anybody else reading this–this is for Lynn and the foster mom only–don’t go granting 8332’s to Aunt Agnes or what have you. We’re talking custodial and non-custodial parents–which is what Lynn and the foster mom are.
Been seperated moved out with my 4yr old
Since July 1 2012 was a stay at home mom and couldn’t find a job til Nov. Haven’t made a lot of money was filing a joint return I didn’t know anything about tax laws my husband does so I told him I don’t mind filing together I just need advice I would like to talk to my lawyer or call IRS so I don’t do anything wrong and it comes back on me. My husband is very mean all I wanted was advice and not from him he will not file jointly says I had my chance all because I said I wanted advice before we file. He makes a lot more than I do I only have a part time job take care of our son most of time he pays child support everymonth. I don’t know anything about taxes he has done them every year.what am I entitled to claim and what is he entitled to. There is no reasoning with him all he does is call terrible names when I try to talk to him about this. He also says he is filing without me today.
Michael, you can file your taxes on turbotax and send them in. You have to wait untul the 30th to get ACCEPTED, but my taxes are done and complete. I have to amend because they’re already shipped off. You may need some schooling in the tax area, the information you provide isn’t so accurate. You’re scaring me, lol. Thank you, Jan! Appreciate your help!!!!