Rejection F2441-526 - What to do if I did NOT claim my child as a dependent

[DnArturo]

This year is not my turn to claim my child as a dependent and I entered the child as a non-dependent.  I am still surprised to go through all the questions of how much the child's care cost and answered honestly.  When I go to submit, I get rejection code F2441-526 which says somone else claimed the child as a dependent which is what I was expecting... but why am I getting this code?  I entered I was not claiming the child this year.

[Opus 17]

Under the special rules for children of divorced or separated parents, the only parent who can claim the child as a dependent is the parent where the child lived more than half the nights of the year.  This is the custodial parent under the tax law, and the IRS only counts where the child lived; there is no 50/50 custody, you have to actually count nights.  The non-custodial parent can only claim the child as a dependent if they custodial parent gives them a signed form 8332 release form.  Even then, the custodial parent can still use the child to qualify for the daycare credit, EIC and head of household status, because those benefits can't be waived, shared or transferred.

So,  I assume from your question that you are the custodial parent and you gave the other parent a signed form 8332 releasing the dependent claim.  In Turbotax, you should indicate you had custody more than half the year and that you did give the other parent a form 8332.

If you are still rejected after that, it means the other parent filed incorrectly and claimed that the child lived with them more than half the year.  You will need to file your return by mail.  If the other parent doesn't file an amended return to change their answers, the IRS will investigate.

(The non-custodial parent should have answered they had custody less than half the year and were claiming the child with form 8332.  They would then be required to mail the form 8332 to the IRS after e-filing.  If they did this correctly, it would not have caused a conflict with your return.  If you did not give the other parent a form 8332, you need to do that now.)

All these rules are contained here,

https://www.irs.gov/pub/irs-pdf/p501.pdf

[DnArturo]

As parents we're not separated, we're just not married.  We file our taxes separately.  Its the other parent's turn to claim the child.  We don't have a form 8332 release form.  The other parent is across the table from me right now and we're doing great as a cohabitant.   So do I set my allocation of days at my house to zero even though the child and other parent is in my house?

[Critter-3 · Accepted solution]

OK ... if you ALL live in the same home the only ONE of you should have the child listed in the program.  SO if the other parent is claiming the child then DELETE the child off your return completely.  

[Opus 17 · Accepted solution]

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@DnArturo wrote:

As parents we're not separated, we're just not married.  We file our taxes separately.  Its the other parent's turn to claim the child.  We don't have a form 8332 release form.  The other parent is across the table from me right now and we're doing great as a cohabitant.   So do I set my allocation of days at my house to zero even though the child and other parent is in my house?

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Under this situation, you can't use the special rules for children of divorced or separated parents.  One parent claims all the tax benefits of the child, and the other parent claims nothing.  You simply need to delete the child entirely. 

[DnArturo]

Critter and Opus, the solution to delete the dependent entirely works. 

It would be nice that when I check the box to not claim as a dependent, that Turbo-tax supresses that information along with the followup questions.

[Opus 17]

@DnArturo 

It’s actually a fairly complicated situation that some of us “experts“ I’ve been complaining about for several years.  (this is a long story and will help you file your tax return so feel free to ignore it.)

There are some times when a parent does not want to claim a child as a dependent but the child still qualifies the parent to claim head of household status, earned income credit, and the daycare credit. Most of the time, this relates to separation or divorce.  So, simply suppressing the interview isn’t enough. Also, the order of interview questions and the structure of the interview is supervised by the IRS, so major changes won’t be allowed.  Some of us have complained for years that the current interview questions can lead to an incorrect result or be misinterpreted when to unmarried parents live together and share custody.  However, we have been told that TurboTax focus grouped the issue and decided not to ask specific questions to identify parents living together unmarried, because that was considered too “sensitive.”  Most pages on TurboTax have a blue or colored link that says something like “tell me more,” and the instruction for your situation that would have told you not to claim your child may be buried there.

In any case, it’s something that some of us are aware of but TurboTax is not willing to move on the issue.