Basically, the situation for past tax returns when you were legally married is that you will need to file a tax return for each of those years. TurboTax only supports the past three years, so you will either need to prepare your older returns on paper using the forms and instructions from the IRS website, or you will need to see a tax professional. You will probably want to file as married filing separately. This often results in higher taxes compared to married filing jointly, but it is probably the only way to protect yourself financially from the fact that your spouse never filed his own returns. With married filing separately, you are not responsible for your spouse not filing.
Then for 2020, if you are still legally married on December 31, you must also file as married filing separately, or head of household. If you are divorced, then you can file as single or head of household.
To file as head of household for 2020, you must either be legally unmarried on December 31, or you must be separated from your spouse and living in separate homes since before July 1, 2020. You must also pay more than half the cost of maintaining the home where you live, and you must have at least one qualifying dependent who lives in that home with you more than half the nights of the year. This qualifying dependent will usually be your own child, although there are some other circumstances that would allow you to file as head of household. The child must live in your home more than half the nights of the year to qualify you for head of household. You must actually count the nights, there is no such thing as 50-50 custody when it comes to the IRS.
For past years, you could only file as head of household if you were living separated from your spouse in those previous years. If you were sharing a home with your spouse than your only option is to file as married filing separately.
As far as claiming dependents is concerned, these are the rules you need to know.
1. on each of your past year tax returns for married filing separately when you were still married to your spouse, either spouse can claim the child on their tax return as long as the parent and child lived in the same home for at least half the year. Only one parent may claim the child on the separate return. If both parents claim the child, the IRS will award the dependent to the parent with a higher income.
2. For 2020, the only parent who has the automatic right to claim the child as a dependent is the parent in who’s home the child slept more nights during the year. There is no such thing as 50-50 custody, you must count of the number of nights. For example, if you all lived together until June, and then separated, and the child lived four nights a week in your home and three nights a week in your spouses home, then you have the greater number of nights.
3. Going forward, in each future tax year, again the only parent who has the automatic right to claim the child as a dependent is the parent where the child slept more than half the nights of the year. There is no such thing as 50-50, you have to count the nights. The parent where the child slept more than half the nights is the custodial parent and is entitled to claim the child tax credit, and to use the child to qualify for head of household status, the dependent care credit, and EIC. The noncustodial parent can only claim the child as a dependent if the custodial parent gives them a signed form 8332 dependent release. This allows the noncustodial parent to claim the child as a dependent for the tax credit, but the ability to use the child to qualify for head of household, dependent care credit, and EIC always stays with the custodial parent and can’t be waived, shared, or transferred. If the court orders you to alternate years that you claim the child as a dependent, this court order is not binding on the IRS. The only way for the parent with custody less than 182 nights to claim the child is for the custodial parent to give them form 8332. If the custodial parent does not give form 8332, the IRS will not award the dependent even though the divorce orders it. However, while the noncustodial parent cannot appeal to the IRS to claim the dependent, they can go back to family court and bring an enforcement action against the custodial parent.
