There is a specific problem that can come up when two people live together and share custody of their own child. In this situation, one parent should not list the child on their tax return at all, and the other parent should answer no to the custody question, because the custody question only pertains to a court order between parents who are divorced or separated and living apart.
When you answer “yes“ to the custody question, a number of unfortunate things can happen. It can cause rejection conflicts with the IRS and it can also cause a child to be listed with the wrong kind of dependent status. When parents are divorced or separated and share custody, it is possible to “split” certain of the dependent benefits, but this is not allowed when both parents live together.
The only reason you would not be asked about the stimulus credit at all is if you’d answered yes in the personal interview to the question, “can you be claimed as a dependent by another taxpayer?” Someone who can be claimed as a dependent is ineligible for the rebate even if the person who could claim them doesn’t claim them. If you were asked how much stimulus payment did you get, and you entered $1200 and $600 for your individual payments, and the program told you that was correct, that would be an indication that your child was not properly claimed as a dependent on your tax return, possibly due to incorrect answers around the custody question.
Without knowing exactly what you put on both tax returns, If it is your desire that your fiancé claim your child as a dependent for 2020, and your fiancé’s tax return has already been rejected, this is what you need to do:
Your fiancé needs to revisit the personal interview and go through the dependent questions again. She must indicate that the child lived with her the entire year, that there is no custody agreement with the other parent. Then, review the stimulus section again under the federal review topic. If your fiancé did not claim the child on her tax return last year, then the program should give her an additional payment as a rebate. She will need to sign her return and mail it to the IRS. When you are ready to amend your tax return, you need to delete the child completely from the list of dependents.
