Claiming

[MollyF30]

Hello! My husband didn't file our taxes last year. But my ex husband ended up claiming my daughter on his taxes after I told him he couldn't claim her and she doesn't stay with him 50 percent of the time. I have all the evidence she's been with me and what I need to prove..I just need to know should we still fight against this while we file for both years this year? Or should I just leave it be and move on? 

[GeorgeDenseff]

Prepare your taxes with your daughter as a dependent.  You will not be able to e-file it.  You will have to print and mail it.  Include all forms needed, sign the return, and mail to the address on the first page of the printout.  I also would include a letter explaining that your daughter was claimed by your ex and should not have been.

It will take a long time, possibly more than a year, but the IRS will contact you and sort out the return.

[xmasbaby0]

@MollyF30 

"My husband didn't file our taxes last year."

Why did  you not file your 2020 tax return?   You could still prepare and mail a 2020 return.   It cannot be e-filed; it has to be mailed.   But if you are the custodial parent then you could claim your child on your own 2020 return.   The IRS will sort out the competing returns that claimed the same child.

And that will also be the case for a 2021 return.   If your ex claims her and really should not claim her. you will not be able to e-file if he files first, but you can print, sign and mail your tax return.  The IRS will process the return and sort out later who can claim the child.

IRS interview to help determine who can be claimed:

https://www.irs.gov/help/ita/who-can-i-claim-as-a-dependent

https://ttlc.intuit.com/questions/3113432-who-can-i-claim-as-my-dependent  

Are you the custodial parent?  Do you have an agreement with the other parent to allow the other parent to claim them--due to divorce or that you live apart and share custody?  Did one of you sign a Form 8332?

If there is a signed 8332 then the custodial parent retains the right to file as Head of Household, get earned income credit and the childcare credit.  The non-custodial parent gets the child tax credit for children under the age of 18.

As far as the IRS is concerned, the custodial parent is the one with whom the child spent the most nights during the tax year--at least 183 nights.

[fanfare]

you must be well off financially if you are willing to just "move on".

If you are not eligible for the advance child credits or other credits due to income phaseout, it doesn't make much difference to you.

He will have to pay back any credits wrongfully claimed when IRS finally gets around to it.

Right now IRS is backlogged with millions of tax return to examine.

[Hal_Al]

There is a way to split the tax benefits. 
This may be helpful in your negotiations with the ex:

 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/child tax credit; the custodial parent is still allowed to claim the same child for Earned Income Credit, 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 you 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 him.

 So, it's 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.

Ref: https://www.irs.gov/publications/p17#en_US_2017_publink1000170897

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