Q. Custody of two grandchildren for seven months of 2021I filed as dependents yet the mother did also. Who is qualified to claim the two kids ad dependents?
A. Simple answer: you. You are closely related and they lived with you for more than half the year. The mother is more closely related but the kids were with her less than half the year (unless she also lived with you while the kids lived with you).
If someone else claimed your dependent inappropriately, and if they file first, your return will be rejected if e-filed. You would then need to file a return on paper, claiming the child as appropriate. The IRS will process your return and send you your refund, in the normal time. Shortly (up to a year) thereafter, you'll receive a letter from the IRS, stating that your child was claimed on another return. It will tell you that if you made a mistake to file an amended return and if you didn't make a mistake to do nothing. The other party will get the same letter you did. If one of you doesn't file an amended return, unclaiming the child, the next letter, from the IRS, will require you to provide proof. Be sure to reply in a timely manner.
Winner gets the tax benefits; loser gets to pay the IRS back with penalties and interest. The IRS goes by physical custody, not legal custody.
https://www.thebalance.com/claiming-same-dependent-audit-risk-3193030 (audit discussion)
