My ex-fiance and I have 50/50 custody of our three children. The oldest two are not biologically mine, and as their father and I never married, I’m not sure what the legal term for the IRS would be. Our custody papers state that in odd-numbered tax years, I get to claim one of my non-biological children, but can I claim him as a qualifying child? I don’t know if he’s technically my “stepchild”, but I was granted custodial rights by the court.
The easiest way to determine whether or not you can claim someone as a dependent is to use this IRS online tool:
https://www.irs.gov/help/ita/whom-may-i-claim-as-a-dependent
This is where I get stuck. I don’t know if they qualify as stepchildren if we weren’t married but I have joint custody. I mean foster children qualify and that’s a court placement but it’s just murky as all get out.
Here's the legal definition:
A stepchild is a child born to or legally adopted by your spouse before your marriage whom you have not legally adopted.
https://www.law.cornell.edu/wex/stepchild
In order for a dependent to be claimed on a federal tax return, they must meet the IRS criteria - regardless of rulings by a local court.
They are not stepchildren if you were never legally married.
If they are not related by blood or marriage, then they are unrelated people. You can only claim unrelated children as dependents if:
1. no other "taxpayer" can claim them as dependents,
2. they lived in your home as a member of your household for the entire year, and
3. you paid more than half their support, and
4. their taxable income is less than $4700.
This type of dependent will qualify you for a $500 credit for "other dependent", not the $2000 child tax credit.
If the children lived in the other parent's home for some number of nights, then they didn't live in your home the entire year.
However, if the children did not live with the other parent more than half the nights of the year, then the other parent can't claim them either, at least, not as "qualifying child" dependents. The other parent could claim them as "qualifying relative" or "other" dependents if the other parent paid more than half their financial support, or if the other parent gets a signed agreement from everyone who paid more than 10% of the child's support (that would be you) agreeing that you will not claim them and the other parent can. This is called a "multiple support" agreement and is found in publication 501. This type of dependent would not allow the other parent to file as head of household or claim EITC.
https://www.irs.gov/forms-pubs/about-publication-501
Also, it is important to mention that the IRS does not recognize court orders, and there is no such thing as 50/50 custody in a year with an odd number of days. The IRS only recognizes where the child physically spent the night. You can't even claim the biological child you share together unless that child lived in your home more than half the year, which means the child slept in your home 183 or more nights. (For sleepovers with friends, vacations, and visits to grandparents, you get credit if it would have been your night without the activity.) If you did not have physical custody of the child in your home for 183 or more nights, you can't claim them even if the court says you have 50/50 custody. You may need to get a calendar and count the actual nights.
Just to clarify in support of what others are saying here. The IRS is not bound by any court document you may have from a state court or lower. Only a federal judge can over-rule the IRS. Since federal judges don't handle custody cases, I'm quite confident in saying that will never happen.
You have to qualify under the IRS rules in order to claim dependents, regardless of what any state level or lower legal authority may say.