Ex wrongly claimed dependent got EIP but my income is below filing threshold

[lastlist]

My ex and I have been separated since late 2017 and legally fighting over custody since Feb 2019. I have always had primary and at least 70% custody. We filed married jointly for 2018 and all credits went to his accounts. 
My ex claimed our child on his (married separate) taxes for 2019 and, as far as I know, received the economic impact payments associated. 
Personally my income is below the minimum amount to file so this year I filed with the non-filers website and have received an EIP payment for myself.  
I’ve read that in order to fix my ex’s mistake I have to now file a paper return and wait. Does anyone know how/if this will work due to my low income and his already receiving the EIP?

[Critter-3]

Although you could paper file now I highly recommend you wait until the 2020 return and get the credit then since paper returns are taking 4+ months to process right now.  Let the other party know you will file a return and will claim the child.  This is something that needs to be addressed in the divorce decree so talk to your attorney ... here are the facts to use ... note that IRS definition of  custody and the courts definition are not the same.

There is no such thing in the Federal tax law as 50/50, split, or joint custody.  The IRS only recognizes physical custody (which parent the child lived with the greater part, but over half, of the tax year.  That parent is the custodial parent; the other parent is the noncustodial parent.)

Who can claim the exemption and credits depends on who is the custodial parent. (By the IRS definition of custodial parent for tax purposes - this is not the same as the legal custody that a court might grant.).

The test that the IRS uses to determine the custodial parent is where the child lived for more than 1/2 (or greater part) of the year. The IRS will go so far as to require counting the nights spend in each household - that person is the custodial parent for tax purposes (if exactly equal and more than 183 days - The custodial parent is the parent with the highest AGI, if less than 183 days then neither parent has custody so the child cannot be claimed by either parent). And yes they are that picky.

See Custodial parent and noncustodial parent  under the residency test in Pub 17

https://www.irs.gov/publications/p17#en_US_2017_publink1000170899
 
Only the Custodial parent can claim: (Child would be listed as non-dependent EIC & CC only)
-Head of Household 
-Earned Income Credit
-Child Care Credit

The non custodial parent can only claim: (Child would be listed as dependent)
-The Exemption
-The Child Tax Credit

But only if specifically specified in a pre-2009 divorce decree, separation agreement or the custodial spouse releases the exemption with a signed 8332 form - after 2009 the IRS only accepts a signed 8332 form that must be attached to the non-custodial parents tax return.

Note. If you are the non-custodial parent filing your return electronically, you must file Form 8332 with Form 8453, (U.S. Individual Income Tax Transmittal) for an IRS e-file Return. See Form 8453 and its instructions for more details.  This must be done within 3 days of your e-filed return being accepted by the IRS.

If you are the custodial parent where the child physically lived for more than half the year (183 nights) then:

When you enter the dependent, you say that he/she is "Your child" (not you and your spouse if remarried), 
he/she lived with you the whole year, 
“no” the child did not pay more than half of his/her own support,
"yes", you have a custody agreement, 
and "yes", the other parent is claiming this year.  

That will give you the EIC, Child Care Credit and Head of Household filing status if you otherwise qualify.

The child would be listed as "non-dependent EIC & Dependent Care only".
The other (non-custodial) parent can claim the child’s exemption and child tax credit only and needs a signed 8332 form to do so.

===

[lastlist]

We tried to get it added in to our custody agreement but the judge said it was unnecessary. Nothing was added to our divorce agreement or decree about taxes. 

[Critter-3]

Good ... even better.   Then you follow the IRS rules of custody ... review them and make sure the other party understands them ... the custodial parent claims the entire child unless they waive part of them to the non custodial parent via a form 8332.

[Hal_Al]

You need to work out, between you, or in court papers, who will claim the child on your 2020 tax return.  The $500  stimulus payment for a child under 17 is a secondary issue.  The big issue is the up to $2000 child tax credit.  If your income is below the filing threshold, you will see little or none of that $2000.  It is better for the ex to claim it.  You should make a deal to let him claim the  child tax credit and turn over the $500 stimulus to you.

Read on for more on this issue.

_________________________________________________________________________

 The custodial parent has first priority on claiming the children on her taxes; regardless of the amount of support provided by the non-custodial parent. The IRS goes by physical custody, not legal custody. 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. (without conditions - usually the payment of child support). Even if a divorce decree, dated after 2008, gives the non-custodial parent the right to claim the child, he must still get form 8332 from the custodial parent. A properly worded decree should require her to provide that form. https://www.irs.gov/pub/irs-pdf/f8332.pdf

For tax purposes, there is no such thing as joint custody, regardless of what your legal agreement says. The requirement, to be custodial parent, is that the child live with you MORE than 50% of the time. One of you has to be the custodial parent and the other the non-custodial parent. The IRS goes by physical custody, not legal custody. 

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/exemption/child tax credit; the custodial parent is still allowed to claim the same child for Earned Income Credit, Head of Household filing status, 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 exemption 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: http://www.irs.gov/publications/p17/ch03.html#en_US_2014_publink1000170897 Scroll down to "Children of divorced or separated parents (or parents who live apart)"

Note: when using Married Filing Separately (MFS) filing status, you are not allowed to claim the EIC or Dependent Care credit.  If the child  lives with you, you may qualify for the Head of Household filing status which does allow those credits

[Carl]

my income is below filing threshold

Nothing to do with taxes,  but it raises questions on how you provided more than half of the child's support for the entire tax year.

When it comes to taxes, you have to follow the IRS rules. Only a federal judge can over ride the federal tax laws, and since federal judges do not deal with divorce or custody cases, that will never happen. What a lower court says or decrees holds absolutely no weight with the IRS since the IRS is governed by federal tax laws. You have to follow the IRS rules with no exceptions.

[Critter-3]

@Carl 

Support has nothing to do with claiming a child ... it is the child who cannot provide more than 50% of their own support.   Support comes into play when claiming the HOH filing status. 

[Carl]

Yes.  But still, the rules referenced by Hal_Al apply.

I was mixing/confusing things with a prior post where someone was claiming a married parent as a dependent, under the false belief that would qualify them for an additional $500 stimulus payment.

[Michelesr89]

Wondering the same thing I am the caregiver of our 3 year old always have been and he has been getting the credit for 3 years!! When she lives with me I provide most stiff for her including all medical! How do I fix this??

[Critter-3]

FILE A RETURN to assert your right to claim the dependent even if you must mail in the return ... then the IRS will decide who is telling the truth and severely punish the wrongdoer ...

 The custodial parent has first priority on claiming the children on their taxes; regardless of the amount of support provided by the non-custodial parent. The IRS goes by physical custody, not legal custody. 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. (without conditions - usually the payment of child support). Even if a divorce decree, dated after 2008, gives the non-custodial parent the right to claim the child, he must still get form 8332 from the custodial parent. A properly worded decree should require her to provide that form. https://www.irs.gov/pub/irs-pdf/f8332.pdf

For tax purposes, there is no such thing as joint custody, regardless of what your legal agreement says. The requirement, to be custodial parent, is that the child live with you MORE than 50% of the time. One of you has to be the custodial parent and the other the non-custodial parent. The IRS goes by physical custody, not legal custody. 

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/exemption/child tax credit; the custodial parent is still allowed to claim the same child for Earned Income Credit, Head of Household filing status, 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 exemption 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: http://www.irs.gov/publications/p17/ch03.html#en_US_2014_publink1000170897 Scroll down to "Children of divorced or separated parents (or parents who live apart)"

Note: when using Married Filing Separately (MFS) filing status, you are not allowed to claim the EIC or Dependent Care credit.  If the child  lives with you, you may qualify for the Head of Household filing status which does allow those credits

[lastlist]

Where does one find a form to file an amended return?

Being under filing threshold, do I use the standard form?