Does IRS tax law trump an old divorce decree when claiming dependents

[mperez2011tax]

My ex and I agreed to alternate claiming our son in our divorce in 2010. Dad has odd years so 2019 is his to claim our son (remember this). He was actively exercising his visitation, etc., paying his support on time always, excellent dad. Then son diagnosed with Autism, which required me to have to take fmla in 2013 & I didn't work until late 2018. Only income coming in was his support & eventually SSI after my nest egg was gone but they're exempt so never filed taxes thus didn't claim child on even years. 2015 dad remarried and stopped his visitation when he moved about 8 states away. They stayed in touch at first, but calls are down to 1/mon maybe & a couple weeks a year in the summer. I just went back to work in late 2018, so 2019 is my 1st return since 2012. It's electronic now, yay, but according to your wizard I qualify to claim our son & dad doesn't since he moved & I have him almost 365. So I added him (I assumed dad already knew he couldn't claim him any longer once he moved & if not a tax professional does his taxes so they had to tell him). eFiled and it was rejected? Now what do we do? I qualify by irs tax law, but our decree was never changed & says he can since I didn't this know until 2 days ago. Does IRS tax law trump old agreements? Btw, we also never had that 8### Form done or signed. So how has dad been able to claim him in the 1st place & all these years, especially bc when I get SSI (that is funded by IRS tax $) for our son as his custodial parent AND he is in the NJ registrar for disabled children where all of our info (SSN, address in NJ, etc.) had to be provided and dad lives in Fl? 

I also have a smaller question about the stimulus now too, since I didn't file any return in 2018, won't get my 2019 return in until we know who can claim our son & if dad does have to amend his it will be longer PLUS I also get SSI on my son's behalf (technically it's not my SSI benefit it's in his SSN, but payable to me & deposited in my bank account). So am I eligible for the stimulus due to SSI benefits & get paid soon from that, if so do I have to claim my son for the addes $500 stimulus as a non tax filer, or bc it's a child's SSI benefit the $500 is automatic OR bc it is his SSI & not mine, do I have to file my 2019 taxes before I get the stimulus? I'm so lost.

[Opus 17]

Federal law always overrides state laws, or in this case, state family court orders.  If you have custody more than half the nights of the year, you can claim your child.  However, because your ex also claimed your child, you need to print your return and file by mail.  The IRS will process the return and pay your refund, but eventually they will send letters to both parents starting an investigation and asking for proof of where the child lived.  If you can prove the child lived with you, your ex will have to repay part of their refund with interest.

 However, if, by claiming the child, you violate a court order, your ex can go to court and request that you be held in contempt, or forced to release the exemption, or be punished in other ways.  The IRS will follow federal law, but the state court can issue other orders against you.

Also you need to be aware, I suspect you have not been giving your spouse form 8332.  This is a dependent release, you must sign it and give it to your ex to allow your ex to claim the child.  The parent where the child lives is the only parent allowed to claim the dependent care credit, EIC and use head of household status, those tax benefits can't be waived, released, shared or traded.  If your ex was claiming the child without form 8332, they must have been claiming the child lived with them, and they may have received excess improper tax benefits. 

[mperez2011tax]

@Opus 17 thanks so much, it helps a lot. However, me and my son live in NJ, dad lives in Fl. He sees him a week or 2 a year in summer, that's it. So even if NJ divorce agreement says he can claim for 2019 (agreed when Dad was in NJ & having weekly visitation), he still doesn't met the eligibility, because he doesn't have him enough & doesn't provide half his support, since he moved. So, then by irs standards he's filing falsely if we correct it for him then by virtue &  NJ standards,  I'm in contemt of an order. So, one of us will have to risk more than just the exception in these circumstances? Dad, agreed to amend his, but now I don't feel comfortable being in contemt. Fortunately, this was just a mistake that we didn't discuss 1st or fix the order earlier and we get along very well, but neither of us wants to be on the wrong side of the law. Any advice? Since my son is disabled and gets SSI & other NJ benefits does that make it more complicated? 

[Opus 17]

In order to honor the court order and allow your ex to claim the child, you would give your ex a signed form 8332.  In Turbotax, you would indicate that the child lived with you, and that you are releasing the dependent to the other parent with a signed form 8332.  Turbotax will still allow you to qualify for EIC and head of household, if you otherwise qualify.  If you are then blocked from e-filing, it can only be because your ex claimed the child as if the child lived with him, which is not correct and which would allow the ex to claim excess tax benefits.  You would mail your return, mail the form 8332 to your ex, and suggest your ex re-check their return to make sure they filed correctly.

If you do not want to honor the court order, that is up to you.  Your ex would have to file a complaint with the NJ court, and if the ex is himself in violation of parts of the order, that might influence the judge's decision.  But it;'s up to you. 

[mperez2011tax]

@Opus 17 yeah I don't think he'll want to open door. There's life ins, etc. he didn't do, not that I gave him a hard time either. What I think we'll do is what you said, I didn't understand before, but I get the difference between child exemption & earn income credits, etc. So, we'll do that and  he'll be covered and he said he'd give me a portion plus the full stimulus he got for our son. Then moving forward, we'll change the order so I claim him from now on, since he's in agreement too. Thanks for all your help.