child exemption

What is the name of your state? Virginia
Hello all, we live in Virginia, stepdaughter lives in Indiana. A few years ago, her mom told us that we could claim her on our taxes every year until the child support abates (she is 11) because she didn't work. etc. Well, because we don't have custody, we don't pass all four of the dependency tests. The mom did sign a 8332, but it is no good, I found out, because they my husband and the mom) were never married. I would like to try and claim the child on out taxes this year, but the mom just got married, and I have a feeling, even though she said we could claim her, her new husband is going to do it. I just don't want to get into trouble...and I don't trust her to give us an accurate answer, she has a habit of promising things, then circiumstances change, and she doesn't tell us. Any suggestions? The judge said in a modification hearing in Aug. that beginning on our 2003 taxes (so, in 2004) we can claim her.

[abezon]

Actually, it doesn't matter what the judge said. Since the parents were never married, the dependency exemption goes to whoever pays more than 50% of the child's support. You have to consider all forms of support: child support you pay, support provided by mom & step-father, and support provided by the state (welfare).

If mom didn't work last year, and your husband paid significant support, there is a good chance he paid more than 50% of the support and can claim the child. Check the support order. Is mom receiving any welfare/unemployment? Does most of mom's income stem from support? If you believe you provided the support, claim the child. Be prepared to prove how much support you paid AND how much support all other people/entities paid.

Note: if you file first, you have a leg up in the battle. BUT you have to honestly believe (under penalty of perjury) that you qualify to claim the child. Do a support worksheet every year and keep it with your tax return. That way, even if the IRS disallows the exemption, you avoid fraud charges. The worst they can do is disallow the exemption and charge a smallish amount for interest & penalties on the amount they make you repay.

Thank you for your reply...mom is not longer getting welfare for this child (we paid back what she recieved once she had filed the paternity papers) and she IS working, but does daycare that isn't reported, so that is a non-isssue. The step dad HAS bought a home the family lives in and has a steady job, which is where the other part of the child's support is from. We DO pay a substantial amount, and it was just raised by another $100. Like I said, mom signed the 8332 and marked the box and wrote "all future years" that we could claim her. I don't think SHE knows it was the wrong form (our tax guy told us) so I would assume she is still under that impression and won't try to claim her. We don't even get a regular return, I am a fulltime student and my husband has basically no withholdings held through the year (he is military) so we have the money throughout the year. We ONLY get EIC, and I am not sure if one more child (we have 3 of our own) would even make a difference with that, we may be maxed out for deductions according to EIC rules, and I can't seem to find a set answer on this, maybe you can help??

[abezon]

You can't claim the daughter for EIC because she lives with her mother.

To answer your next question: what if we claim her anyway? You can only claim her as a dependent if you paid more than 50% of the support. Now, if mom signed an 8332 and no one else tries to claim the child, the IRS will probably never catch it. BUT you're risking a finding that you filed a fraudulent return if the IRS does catch you. Which they will if step-dad talks to a tax preparer who knows his/her stuff and decides he pays more than 50% of the support and can claim the girl no matter what the court says. Things could get very ugly, with audits going back 20 years......

Thanks, I guess I knew that, and I am not the type of person to be underhanded in dealings, and would NOT want ohe IRS coming after my family or my stepdaughter's family! Thank you for your time!