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Can the grandparents claim the kids?

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robbob

Member
What is the name of your state? MA

I have a few questions regarding claiming my two children for tax purposes. My wife and I separated at the end of March 06 and she took the kids and moved in with her parents. My wife did not work at all in 06. Her parents said they are going to claim the children.
According to their C.P.A. and mine, the parents are entitled to claim the kids because they have lived with them for more than half the year. My attorney disagrees, saying I should claim them. She said as long as my wife signs a joint return with me, her parents have no claim. Who is correct? Also, I’m not sure I’ll be able to get my wife to file jointly w/me. If she refuses, is there any way I can still claim them?
As I said, my wife doesn’t work; I provide child support which is their sole source of income. According to the financial statement my wife filed with the court, she pays her parents x amount of dollars each week for gas, electric, oil, and misc. expenses. Are her parents supposed to claim that money as income? (I don’t think she really pays them anything). If they are supposed to claim it and don’t, could they get in trouble, or could my wife be in trouble for filing a false financial statement? (If they DON'T claim the $ because they say she doesn’t pay them, if it comes down to that w/ the IRS).
I hope this makes sense to everyone, and I appreciate any input.

Thanks
 


LdiJ

Senior Member
What is the name of your state? MA

I have a few questions regarding claiming my two children for tax purposes. My wife and I separated at the end of March 06 and she took the kids and moved in with her parents. My wife did not work at all in 06. Her parents said they are going to claim the children.
According to their C.P.A. and mine, the parents are entitled to claim the kids because they have lived with them for more than half the year. My attorney disagrees, saying I should claim them. She said as long as my wife signs a joint return with me, her parents have no claim. Who is correct? Also, I’m not sure I’ll be able to get my wife to file jointly w/me. If she refuses, is there any way I can still claim them?
As I said, my wife doesn’t work; I provide child support which is their sole source of income. According to the financial statement my wife filed with the court, she pays her parents x amount of dollars each week for gas, electric, oil, and misc. expenses. Are her parents supposed to claim that money as income? (I don’t think she really pays them anything). If they are supposed to claim it and don’t, could they get in trouble, or could my wife be in trouble for filing a false financial statement? (If they DON'T claim the $ because they say she doesn’t pay them, if it comes down to that w/ the IRS).
I hope this makes sense to everyone, and I appreciate any input.

Thanks
Your attorney, while well meaning, is wrong. Even if you and your wife file a joint return, its pretty clear that the grandparents can demonstrate that the children live with them and that they have provided more than 50% of the children's support for 2006.

That is why both their CPA and yours, have come to the same conclusion. If you paid a high amount of child support that might be arguable, but since your CPA agrees with their's, I suspect that your child support is not enough to refute the argument that the grandparent's are providing more than 50% of the children's support.

Your attorney is not a tax expert and therefore you should not be taking tax advice from your attorney.

If your wife does give them money, the grandparents cannot get into trouble for not claiming it as income. That is merely a family member contributing to the expenses of the shared household.

I see an even further problem here. Lets say that the state court judge orders that you get the exemption for the children. That is between you and mom, and mom has no income so she clearly isn't going to claim them. If the grandparents can demonstrate that the children live with them and they provide more than 50% of the children's support, then the IRS is going to rule in their favor, court order or not. Mom didn't claim them, the grandparents did. The grandparents are not a party to your family law case and cannot be punished by the judge for doing so.
 
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robbob

Member
Thanks, I was pretty sure that was the answer I was going to receive. For the $4,800 difference between me jointly filing with the wife and claiming the kids, to me filing by myself and not claiming the children, I figured it was worth asking.

Now, does the law state they can claim them because they've lived with them for the majority of the year, or because they've provided more than 50% of their support? If the later is the case, I pay $245 a week for support and have the cancelled checks to prove it. I doubt they contribute that much weekly to support them. Anyway... I do appreciate the response, thanks again.
 

LdiJ

Senior Member
Thanks, I was pretty sure that was the answer I was going to receive. For the $4,800 difference between me jointly filing with the wife and claiming the kids, to me filing by myself and not claiming the children, I figured it was worth asking.

Now, does the law state they can claim them because they've lived with them for the majority of the year, or because they've provided more than 50% of their support? If the later is the case, I pay $245 a week for support and have the cancelled checks to prove it. I doubt they contribute that much weekly to support them. Anyway... I do appreciate the response, thanks again.
Its both.....but the fact that they live with the grandparents is a biggie.

Also, you neglecting to take into consideration the children's pro-rata share of the housing expenses, the utilities, food and sundries provided by the grandparents. While I realize that you are providing generous child support, that doesn't mean that the grandparents are not incurring greater costs than you, nor that your money is even going towards providing those basic expenses.
 

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