Can older brother claim HOH, CTC & EIC for younger brother while non-custodial pays over half the child's support & court forced custodial parent to sign form 8832?

[apenaestrella]

What happens when a non custodial parent pays child support and a non parent claims the child because the child lives with them?

Custodial parent is disabled, married, & lives with their spouse & with my two sons ages 20 & 15. My older son is the only one that works & allegedly pays all the bills. Older son claimed HOH, his parent as dependent, & his younger brother. I went to court to enforce the form 8832 & custodial parent was forced to sign it for me per the court order , and I plan on filing a tax return and claim the CTC for my younger son. I understand the IRS doesn't care about court orders & fear that my son will move ahead with his current filing status. I will be able to prove to the IRS that I pay over 1/2 of my youngest son's support, but, I believe what I pay in support is more than just the support of one person; there is enough left over to cover another household member's support. They live is a subsidized household & expenses are very small. Will my son be audited? If so, If I can prove I provide over half my younger's son support & then some, would that then not make him eligible to claim HOH & EIC? I'm am very worried about this. 

(HOH - Head of household EIC: Earned income credit CTC: Child tax credit). Thank you!

[Carl]

The 8832 applies to the parents only. Not to anyone else. If the child is claimed by anyone other that non-custodial parent that has the signed 8332 from the custodial parent, that is not proof of anything.
" I will be able to prove to the IRS that I pay over 1/2 of my youngest son's support, "
Why bother? If you are the non-custodial parent with a signed 8332 from the custodial parent, you don't have to prove anything to anyone. But if someone else claims the dependent that 8332 is for, it's possible you could be audited. But I doubt that would happen unless the custodial parent who signed that 8332 wants to make a stink about it with the IRS.

[apenaestrella]

That's what I feared! The custodial parent has been pressuring our oldest son to file because she says since he lives with the younger son, that "he" has the right to claim him because he "supports him". The issue is that they live in a subsidy (i.e. food-stamps, housing, health care) and their share of the bills are relatively small compared to the large amount of support I provide. The support order is actually for 2 kids, but the oldest not in school, works full-time and allegedly pays the household expenses for all four them (parent, parent's husband (don't know the working status or lack there of, brother and the older son).  We went to court and the judge ordered her to sign the form per the court order, but I understand it means nothing to the IRS as one has to proof support etc, but I am worried about the consequences for my son because his parent pressured and lied to him about having the right to do this.  I'm to trying to figure out what the IRS will do once I file.

[apenaestrella]

Oh and yes, custodial parent is making a fuss and almost got thrown in jail for refusing to sign the form.

[Opus 17 · Accepted solution]

Older son has the right to claim younger sibling as a dependent as long as they lived together more than half the year, AND the older son has more taxable income than both the custodial parent and step-parent.  In that case, there is nothing you can do about it and your form 8332 is irrelevant.  You can't claim anything.  Whether the older son can also claim HOH status depends on whether the older son paid more than half of the total living expenses of the household.  This requires an analysis that includes all the taxable and non-taxable income coming into the household including child support, disability payments, the older son's income, and any other state or charitable assistance to the family.

If the older son chooses to not claim the younger son as a dependent, then you can claim the younger son using the form 8332 release.

I believe the older son's claim (based on residency and the parent's income being lower than his) makes the form 8332 irrelevant.  However, I am not a tax attorney.  It is possible that, if the custodial parent waived the dependent to you, that choice (made by a parent) has priority over the ability of a sibling to claim a younger sibling.  I'm not sure how the tiebreakers run. You may want to run the situation past an enrolled agent.

[apenaestrella]

Thank you Opus 17, this is VERY helpful! It is the scenario I was thinking.  I'll let the IRS determine how they want to figure that out.  My son's income is relatively low, (less than $21,000) and he was able to  save $5k on his own and pay his own bills, have taxes taken out, and pay "all" the household bills.  The total amount of monthly expenses would be divided with 4 people and at minimum per the IRS to determine support, and his portion would have equal over $10k just for my son alone to prove that he provided over half of his support, and that's a huge burden.  I believe based on past conversations, his contributions are around $500 or $700 tops.  He also lived with me through May of 2018, which only gives him 8 months worth of expenses. And that's because 30% of his income is rent for HIS own income.  Please let me know if you have additional feedback; otherwise, I will post what happens when I file.  But it won't be for a while because I filed an extension and am in no rush at this point.   

[Hal_Al]

.
 The support test for a “qualifying child” (QC) dependent is only that he didn’t provide more than half his own support. So, it also doesn't matter  if the 20yo  doesn't provide more than half his sibling's support. But there are special rules for divorced parents. But to be applicable, the two parents together must have provided more than half the child's support. So, it does matter how much support you provided.

So, the 15yo is the qualifying child of his 20yo brother.   I'm of the opinion that the IRS will honor your signed form 8332, because you are the parent and he is only a sibling (tie breaker rules).

But, your older son’s claim of his younger brother as his QC dependent will trigger an IRS audit, if you both claim the child.  One of you will have to pay back all (or most) of his refund.

The smart thing for the older brother to do is only claim his younger brother for EIC and not CTC or dependency. That is allowed.

HOH, for the 20yo, is another whole issue, but you, as non-custodial parent can NOT claim HOH, on your return, based on the 15yo dependent, regardless of what the 20yo does.