Can a parent claim married child as dependant if her spouse has tax liability

[gramesmith]

I got married in November 2013. My spouse's mother wants to claim her as dependent since she was staying with her till November and she has paid for her living expenses and tuition. I have a taxable income of abut $70,000 for this year and I paid about $10K in federal taxes. My spouse graduated in May 2013 and could have earnings of less than $1,000 for this year.

My spouse would be 23 by December 31st of this year and we are debating whether we should file separately and let her mom claim her as dependent or to file jointly and claim higher deduction.

I have checked the qualifying child articles on the IRS website, I could not understand the marital status clause clearly. Can her mom still claim her as dependent. Could someone please help me out with this dilemma.

[bwa · Accepted solution]

A parent cannot claim a child in that situation unless you and your new wife file separate returns as married filing separately.  In that case, if your wife had no income, they could.  (However, filing MFS will likely increase your tax liability more than you would anticipate.)

For what it's worth, the choice is yours.  If you file a joint return and they claim her as a dependent, your return is correct and theirs is not.

[gramesmith]

Thank you for the answer. I am trying to convince her mother to not claim her as dependent as the refund is much higher if we file jointly, thanks again.

[BobB7]

It might make sense to prepare hypothetical returns: you MFS, your wife MFS, you both MFJ, her parents with her on, her parents without her.  In  a friendly family, you all follow the strategy with the lowest overall tax, and then settle up in a fair way.  But as bwa says, friendly or not, if you both file a MFJ return that's final: they cannot claim her.

[lswan09]

what if the parents claim them before you are able to complete your taxes. How do you proceed. Can I still file MFJ? It looks like from above if I did my taxes would be correct and the parents would not.

[wij]

You file on paper if they've e-filed before, and IRS would contact parents and ask them to amend.