If you already verified that you have entered the correct social security numbers, you'll need to paper file your return as the IRS will continue to reject your attempts to e-file.
Then, if you know who claimed your dependent, ask them to amend their return by removing the dependent from their tax return. Amendment processing can take weeks, even months, which is why it's best to paper file your return in the meantime.
If the other taxpayer is uncooperative, the IRS will eventually contact both of you to figure out who gets to claim the dependent. The losing party will then be liable for any additional taxes, penalties, and/or interest as a result of the false claim.
Important: If you suspect identity theft, please contact us for further investigation. Read more here.
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If someone else** claimed your child 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 children as appropriate. The IRS will process your return and send you your refund, in the normal time. Shortly thereafter, you'll receive a letter from the IRS, stating that your child(ren) 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 not do anything. The other party** will get the same letter you do. If one of you doesn't file an amended return, unclaiming the child(ren), 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 custodial parent almost always wins. The non-custodial parent can only claim the child as a dependent if the custodial parent gives permission (on form 8332) or if it's spelled out in a pre-2009 divorce decree.
**The usual suspects are:
- The other parent
- The child claimed his own exemption
- Some other member of the household (e.g. grandparent)
- Someone else the child lived with for part of the year
