Question on dependent exemptions

[paupack]

What is the name of your state? PA

If our divorce was final 2 days before 2004 was over and we already had a custody agreement in place that gives me more than 50% of custody, then no matter what, I get the exemptions, right? As I read pub.501, we both pass the first 4 tests of for a dependent and then for #5, support, it FIRST says there are special rules that apply for multiple support and divorced parents in pub.504. In 504, it goes through the questions to find out whether those special rules apply. My ex is determined and has been counseled (by many he says) that he can claim them for both 2004 AND 2005 (and beyond I suspect) because he feels that he paid more than 50% of their support. I suggested he read those pubs. and he indicated they don't apply because he paid more than 50%. Whether he did or not, I don't know (I don't keep receipts for things like food and kids clothes), but it seems to be irrelevant and I tried to explain to him that we are under the special rules area and that the over 50% support thing is for other situations.

The only way he can claim them, it seems, is if I sign an 8332. I'm pretty sure they're mine to claim. NOW, the question after that is, since my self employed income is very very low and claiming them or not doesn't make a difference to my bottom line (and yes, I know I can still take EIC even if someone else claims them), am I allowed to let my boyfriend, who had lived here the entire year and also provided a lot of the food and shelter claim them? I know I'd have to sign an 8332 for him to do it, but are they mine to give like that? My mother says no because he's not their relative, but the test also allows for those living with you (not related).

 

[abezon]

You're combining 3 separate rules.

In general, to claim a dependent, you must pay over 50% of the dependent's support. Parents (divorced or separated) combine the support they each pay to see if together they paid over 50% of the kids' support. When parents divorce, the custodial parent gets to claim the kids unless the decree unconditionally says that the NCP claims them. However, even if the NCP pays 60% & the CP pays nothing, the CP still is the only person legally entitled to claim the kids. . . . Why? Because Congress said so, that's why!

If both parents combined pay less than 50% of the kids' support, neither can legally claim the child. In that case, if there is a non-parent who paid over 1/2 the kids' support, & the kids lived with that person all year (or there is a blood relationship), legally only the non-parent can claim the kids.

It is quite possible for no one to be able to legally claim a child as a dependent, if the child receives social security or welfare benefits.

For this year, I suggest you either sign an 8332 for your ex & let him claim the kids or file & claim them yourself even though you don't need them on your return. You have the option of selling the dependency exemptions to your ex, & filing with the kids on your return would force him to buy the exemptions from you. You'd then have to amend your return & take the kids off, but if he gives $1,000 (about 1/3 of what he gets), you're willing to pay $60 to get your return amended aren't you?


One final note: If you have joint custody & the dependency exemptions are not assigned, then what the decree says about where the kids are supposed to be living is largely irrelevant. The question is with whom did the kids actually live more during the year.

 

[paupack]

No decree

We do not have a decree stipulating exemptions. Originally, I had posed an exemption stipulation in one of the rough drafts for custody, but it got removed in the final proposal that was excepted and is not mentioned in the divorce decree at all.

So - do we (the parents), combined, pay more than 50% of their care. The answer is yes, regardless of which one of us pays it, the answer is yes. The custody agreement gives me the custodial status, so they are mine to claim. I, too, thought about "selling" him the exemptions, but for him he'd rather die than give me money, even if it means he has to pay a couple g's to Uncle Sam because he didn't alter his withholdings to accomodate the loss of exemptions. I've always been our tax preparer, so I'm more in tune to the ins/outs of what's going on and I KNOW they're mine - but my question is... are they also mine to give to someone who has lived with them, too, for 12 months and provided support. Because - the 8332 gives me the right to give them to their father even though he's the NCP - so could I also give them to someone who meets all of the tests except the 50% support test?

I would definitely consider letting their father "buy" the exemptions, but again, I don't want to set a precedent for that happening every year and I highly doubt he'll work with me on it anyway.

 

[Lucy44]

The support test

"- but my question is... are they also mine to give to someone who has lived with them, too, for 12 months and provided support. Because - the 8332 gives me the right to give them to their father even though he's the NCP - so could I also give them to someone who meets all of the tests except the 50% support test"?


They are not yours to give to someone who has not provided at least 50% of their support. That would mean that you could not let your boyfriend claim them, unless he covered your financial obligation to your children, and extra, to come up with more than 50% support. I would work at the "selling back" angle. You could give your ex permission for this year only, thus eliminating any worry about setting a precedent.

 

[paupack]

Thank you

You are both awesome for taking your time to work with me on my question. It is smart advice to let me know to simply amend for $60 to get $1,000 if he is so inclined. And yes - that is an obvious "would do" in my book. I could just GIVE him the exemptions, as some of you may think, but if you knew our history, you'd understand why that won't happen. If it were me, I'd certainly buy them for a thousand rather than paying IRS two thousand... but I'm not vengeful and can see the logic in doing that. At this point, I believe he's going to file with them anyway and even though he knows I'm going to because he 100% believes he can. Ah me - the joys of divorce

Thank you again. How generous of you.

 

[abezon]

Then try your best to file first, electronically. If you beat him to the IRS computers, they won't let him have the exemptions at all. Then you're in the position to make him buy the exemptions.

You can't sell the exemptions to anyone. Either your bf paid over 1/2 the kids' support & can claim them, or you & your ex paid over 1/2 theire support & you can claim them. It's factually impossible for both your bf & you/ex to have paid over 1/2 the kids' support.