Q. So he relinquished his rite but don’t i ultimately have the only rite to claim both girls.
A. No. Technically, you meet the requirements for the children to ne your "Qualifying Child" dependents, but you still need your son's permission (only verbal) to do so (I assume he lives with you and the children). To do so would violate the court order to release the dependency to the mother. If you claim that child, the IRS will allow it. The mother's only remedy would be to take you and your son to court. Judges take a dim view of having their orders violated. So, you should only claim the one child.
If you son's $8000 of income is from working, he can partially claim the mother's dependent for the Earned Income Credit (EIC).
There is a special rule in the case of divorced & separated (including never married) parents. When the non-custodial parent is claiming the child as a dependent/exemption/child tax credit; the custodial parent is still allowed to claim the same child for Earned Income Credit, Head of Household filing status (your son can't claim HoH), and day care credit. This "splitting of the child" is not available to parents who lived together at any time during the last 6 months of the year; then only one of them can claim the child for any tax reasons. The tax benefits may not be split in any other manner.
Note in particular that the non-custodial parent can never claim the Earned Income Credit, Head of Household filing status or the day care credit, based on that child, even when the custodial parent has released the dependency to her.
So, it's a good idea to let the other parent know that you will be claiming those items, as many first time divorced parents are not aware of this rule and may try to claim those items, which will cause the IRS to send out letters.
