Claiming Dependents on a New Order

I have just been awarded the ability to claim both of my children as dependents. This order went into effect just this last week. However, someone is saying that the other parent has actually been withholding for 80% of this year according to the old decree and that I might not be able to claim them for the full year of 2013 but rather for the upcoming year.
Any experience or advice?

Have you provided support according to IRS rules?

(Remember, IRS is NOT bound by your decree/order)

I think yes. I have been reading the IRS rules and if you are referring to the child spending more nights with me, then yes. But the rules seem different when there is a court order stating who claims the child. If I ignore the old order then absolutely the child is mine to claim. However, until this new order was in place, I could not claim the child. The IRS rules I see do not specify if the is a modification mid year. They do refer to Dec 31st being a Key date and if I recall, Dec 31, 2012 at midnight starts the stats for 2013. So does that mean that what ever was in place then counts for the year?

I'm going to defer to LLworking for this one.

Stand by, I'm sure she'll be around at some point :)

Have you and your ex- prepared and filed IRS Form 8332? Does the court's order mention that form?

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Quoting Tryin2

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I have just been awarded the ability to claim both of my children as dependents. This order went into effect just this last week. However, someone is saying that the other parent has actually been withholding for 80% of this year according to the old decree and that I might not be able to claim them for the full year of 2013 but rather for the upcoming year.
Any experience or advice?

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That is correct per the tax code...but there are variables. The tax code gives the dependency exemption to the parent with whom the child physically resided for more than 1/2 of the year...despite what any custody orders may say to the contrary. However, the "custodial parent" as defined by the IRS may release the exemption to the non-custodial parent by filling out form 8332. The judge cannot rule that a non-custodial parent may take the exemption, because that violates federal law and federal law trumps state law. However, the judge CAN order the "custodial parent" to fill out form 8332, therefore allowing the non-custodial parent to claim the exemption.

Now, there are some important caveats to that. Even with form 8332 there are limits as to what a non-custodial parent may claim. The non-custodial parent may claim the child's exemption, and may claim the child tax credit for the child. The non-custodial parent may NOT claim Earned Income Credit, may not claim daycare credits and may not claim head of household status.

The custodial parent, on the other hand, may claim EIC, daycare credits and head of household even if the non-custodial parent is claiming the child's exemption and the child care credit.

Again, please note that the IRS's definition of custodial and non-custodial parent often differs from what court orders may say or how state family law statutes define the two.

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Quoting llworking

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That is correct per the tax code...but there are variables. The tax code gives the dependency exemption to the parent with whom the child physically resided for more than 1/2 of the year...despite what any custody orders may say to the contrary. However, the "custodial parent" as defined by the IRS may release the exemption to the non-custodial parent by filling out form 8332. The judge cannot rule that a non-custodial parent may take the exemption, because that violates federal law and federal law trumps state law. However, the judge CAN order the "custodial parent" to fill out form 8332, therefore allowing the non-custodial parent to claim the exemption.

Now, there are some important caveats to that. Even with form 8332 there are limits as to what a non-custodial parent may claim. The non-custodial parent may claim the child's exemption, and may claim the child tax credit for the child. The non-custodial parent may NOT claim Earned Income Credit, may not claim daycare credits and may not claim head of household status.

The custodial parent, on the other hand, may claim EIC, daycare credits and head of household even if the non-custodial parent is claiming the child's exemption and the child care credit.

Again, please note that the IRS's definition of custodial and non-custodial parent often differs from what court orders may say or how state family law statutes define the two.

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I have actually never filed that form. So, even though we were joint custody until recently and the judge had only ruled that I could only claim one of the two children, I could have claimed both the entire time? Yes the kids spent more time with me than the ex. Does that mean that I could go back over the last 8/9 years and amend my taxes and have them turn to the ex?

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Quoting Tryin2

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I have actually never filed that form. So, even though we were joint custody until recently and the judge had only ruled that I could only claim one of the two children, I could have claimed both the entire time? Yes the kids spent more time with me than the ex. Does that mean that I could go back over the last 8/9 years and amend my taxes and have them turn to the ex?

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No, you cannot do that for two reasons:

1) You can only go back 3 years to amend a return and still get a refund. Any years prior to that are now closed.

2) You would still get yourself into a sling with the state court judge. While the IRS would side with you, the state court judge could and probably would find other financial ways to punish you for contempt.

That is why its a two-edged sword.

You would also have to be able to prove that the children were with you more than 1/2 of the year, by overnights. Its unlikely that you could get the necessary evidence to prove that going back more than a couple of years.

To add to LLworking's post, doing so will likely ruin the co-parenting relationship too - at least in the short term.

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Quoting Dogmatique

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To add to LLworking's post, doing so will likely ruin the co-parenting relationship too - at least in the short term.

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Not stalking you, I promise... There is no longer any "co-parenting" relationship. I successfully ended that this past month. I get your point, but now you make my point. Ex wants the child exemption but I also want it. I won it in court last month, but the ex is arguing that the first 10 months it was the opposite.

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Quoting Tryin2

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Not stalking you, I promise... There is no longer any "co-parenting" relationship. I successfully ended that this past month. I get your point, but now you make my point. Ex wants the child exemption but I also want it. I won it in court last month, but the ex is arguing that the first 10 months it was the opposite.

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Which again, is true because the children did not live with you for the first 10 months of the year. So, even if you could claim the exemption this year, it would be as the non-custodial parent...with those limitations in place. Plus, you don't have a signed form 8332 from the other parent, and since you cannot prove that the children lived with you for more than half the year (because they did not) the IRS won't side with you if the other parent also claims them.

Plus, I have seen this exact scenario play out in court, several times. Its also unlikely that the judge would side with you for 2013, again, because the children did not live with you for 10 months of the year...but the judge might very well side with you if you used your old orders for 2013, and claimed just the one child.

No, the children DID live with me. We had joint custody but Everyone knows that the children spent and spend 80% of the time with me. No question what so ever. I'm sorry, we just got the ruling from "joint" changed to sole on my part. That's why the change of tax claiming ability too. Sorry for the confusion. Again, the ex had one child to claim for the last 8 years, until the ruling this last month. Living arrangements have only changed to me now getting 90% of the time. Does that help?

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Quoting Tryin2

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Not stalking you, I promise... There is no longer any "co-parenting" relationship. I successfully ended that this past month. I get your point, but now you make my point. Ex wants the child exemption but I also want it. I won it in court last month, but the ex is arguing that the first 10 months it was the opposite.

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(I haven't had a decent stalker in ages - the last one had a habit of posting his entire docket online for all to see!)

And likewise - I'm not stalking you (too busy stalking Number 43), but are you sure "successfully" is right?

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Quoting Tryin2

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No, the children DID live with me. We had joint custody but Everyone knows that the children spent and spend 80% of the time with me. No question what so ever. I'm sorry, we just got the ruling from "joint" changed to sole on my part. That's why the change of tax claiming ability too. Sorry for the confusion. Again, the ex had one child to claim for the last 8 years, until the ruling this last month. Living arrangements have only changed to me now getting 90% of the time. Does that help?

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Yes, that completely changes my opinion. I understood your first post to indicate that your ex had kept the children away from you for 80% of the year. Now I understand that you were talking about tax withholding, not about the ex withholding the child.

However...you still need to be careful there, because when there is a challenge with the IRS, the kind of evidence that you need is hard evidence. School records showing the children live at your address, daycare records showing the children live at your address, medical records showing that the children live at your address...etc. etc.

Its also possible that the judge might feel that it wouldn't go into effect until the 2014 tax year, but much less of a chance of that now that you have clarified things.

Thanks.