Deductions & credits

@Sloan52 - You have options.  All is not lost.  The IRS has a system whereby you can contest the fact that someone else claimed a dependent that you feel you are entitled to claim.  It is a long process but well worth it because it will establish the rule for claiming the child.  You will need to print and mail your return to the IRS instead of e-filing.  Attach a letter of explanation then the IRS will do their investigation to award the dependent.

After a return claiming a particular dependent is accepted, any subsequent return that is electronically filed claiming the dependent will be rejected by the IRS. However, having an IRS accepted return with a dependent is not a confirmation that this taxpayer is qualified to claim this dependent. In other words, if you e-Filed your return with the dependents listed on your return, anybody else e-filing their return after you claiming the same dependent(s) will have their return rejected. However, if another return claiming the same dependent(s) is filed manually (mailed in), then the IRS will apply the tie-breaker rules (see details below).

There may be an exception when the splitting of tax benefits for a dependent is detailed in a legal divorce decree. If you have such a decree that was issued after December 31, 2008, you will need to file your tax return on paper and attach the relevant pages of the divorce decree, including the first page and the signature page. If the decree was issued before January 1, 2009, the IRS will not accept it. However, if you are a noncustodial parent claiming the child as a dependent, you have two options:

1. Multiple Support Declaration: To identify any other eligible person who can claim the dependent, you will need a signed statement from the eligible person waiving his or her right to claim that person as a dependent before you can add Form 2120, Multiple Support Declaration, when you prepare and eFile your tax return on eFile.com. If you already filed your return, you may need to submit Form 2120 via postal mail to the IRS. For situations where the same child may be eligible to be claimed as a dependent or qualifying child by more than one person, the IRS will apply a set of tiebreaker rules to determine who has the right to claim the dependent. Once the IRS receives both returns claiming the same dependent, they will use the tie-breaker rules below.
2. Release of Claim to Exemption for Child: You or the other party can transfer the right to claim a child as a dependent. To release a claim of a child as a dependent so that a non-custodial parent can claim the child, or to revoke a previous release to claim a child as a dependent, you can complete Form 8332, Release Revocation of Release of Claim to Exemption for Child by Custodial Parent. The Form 8332 can NOT be eFiled with your tax return on eFile.com. The non-custodial parent in this situation should also obtain a copy of the completed form from the custodial parent and attach it to their tax return, which they will need to paper file. If you change your mind at any time and wish to revoke your release of claim, you can simply file another Form 8332. Include Form 8453, U.S. Individual Income Tax Transmittal when you mail in your tax return with Form 8332 to the IRS.