Who can claim child when ex resides with his parents & his business does not generate income?

[ari128]

We do not have a judgment/stip but we have agreed to a 50/50 custody split. Never married. Ex resides with his parents and does not have any (legal) income. He owns his own business, funded by his parents equity in their home. The business is not generating any income. Ex plays online poker to "sustain" himself and works minimal hours. I earn more than he does (W2), at least for now, but who knows. As long as ex lives with his parents, can I claim our son on my tax returns? What happens when his business actually makes money, more than I do anyway? He will have the business to write off, so can I continue to claim our son in that event?

If he is entitled to claiming him in the future, can I claim HOH even in the years he claims our son while residing with his parents? (He hasn't paid rent, utilities or his own cell phone bill, just food for himself.)

[DJS]

A taxpayer cannot claim a dependency exemption for a person who can be claimed as a dependent on another tax return.

The term "dependent" means a "qualifying child" or a "qualifying relative."

A. To claim a dependency exemption for a qualifying child, all of the qualifying child dependency tests must be met:

• Dependent Taxpayer Test
• Joint Return Test
• Citizen or Resident Test
• Relationship Test
• Age Test
• Residency Test
• Support Test

All of the following tests must be met to claim a dependency exemption under the rules for a qualifying child.

Dependent Taxpayer Test — Qualifying Child

If you could be claimed as a dependent by another person, you cannot claim anyone else as a dependent. Even if you have a qualifying child or a qualifying relative, you cannot claim that person as a dependent.

Relationship Test — Qualifying Child

To meet this test, the child must be:

• Your son, daughter, stepchild, eligible foster child, adopted child, or a descendant (for example, your grandchild) of any of them, or
• Your brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant (for example, your niece or nephew) of any of them.

Age Test — Qualifying Child

To meet this test, the child must be:

• Under age 19 at the end of the year and younger than you (or your spouse if filing jointly)
• A full-time student under age 24 at the end of the year, and younger than you (or your spouse if filing jointly)
• Permanently and totally disabled at any time during the year, regardless of age.

Residency Test — Qualifying Child

To meet this test, the child must:

• Have lived with you for more than half of the year
• Meet one of the exemptions listed below:
  • Temporary absences — illness, education, business, vacation, or military service
  • Death or birth of child — a child who was born or died during the year

Support Test — Qualifying Child

To meet this test, the child must:

• Not have provided more than half of his or her own support

Note: There are special rules for a child that is the "qualifying child" of more than one person. Do research or get professional advice if you encounter this situation. Please see the following: https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/qualifying-child-of-more...

[xmasbaby0]

You do not say which one of you your child lives with.  As far as the IRS is concerned, the custodial parent (the one the child spent at least 183 nights with) is the one who can claim the child as a dependent.  The custodial parent can file as Head of Household and get earned income credit and the childcare credit.  IF the custodial parent signs a form 8332  (and if you have not been court ordered to sign it then it is your choice whether you want to sign that form)  then the other parent can get the child tax credit--but that credit is based on having income earned from working.  If your ex does not have income from working, he cannot get the CTC.

[IsabellaG]

The parent with whom the child resides for the greatest number of nights is considered the custodial parent regardless of your agreed-upon 50/50 split. Even if it's only one more day. 

[Critter]

Online gambling winnings IS INCOME and should be reported on an income tax return so if you want to you can turn him in for income tax fraud.

https://law.freeadvice.com/tax_law/income_tax_law/report_filing_tax_returns.htm