Filing taxes during custody and divorce

[isis297]

NY State

Couple has been separated since 7/2023. Wife would only allow visitation which didn't turn to overnights until November.

The wife didn't work or provide financially at all until she started working in October.

He is being told that she will most likely be able to claim both children. They don't have a court order and haven't even started divorce proceedings because they are trying to wrap up custody proceedings. I'm confused why he can't just go and file his taxes with no court order and financially providing all support for the first 9 months.

Can there be a legal repercussion to him filing married separately and claiming at least one if not both of the kids?

 

[Zigner]

It might be more advantageous for them to file jointly.

 

[LdiJ]

NY State

Couple has been separated since 7/2023. Wife would only allow visitation which didn't turn to overnights until November.

The wife didn't work or provide financially at all until she started working in October.

He is being told that she will most likely be able to claim both children. They don't have a court order and haven't even started divorce proceedings because they are trying to wrap up custody proceedings. I'm confused why he can't just go and file his taxes with no court order and financially providing all support for the first 9 months.

Can there be a legal repercussion to him filing married separately and claiming at least one if not both of the kids?

It depends on whether or not the couple is separated physically (living in different homes), when that started, and where the children primarily lived during the year. Under the IRS rules the parent with whom the children primarily lived is the parent who can claim the children. It does sound, from your description, that the children primarily lived with the mom, so odds are she is the one in whose favor the IRS would rule if there is a duplicate claim. Who provided the most financial support doesn't kick in unless both parents lived an equal amount of time with the children. Here are the tiebreaker rules:

TieBreaker Rules
Sometimes a child meets the rules to be a qualifying child of more than one person. The following rules must be applied to determine who can claim the child as a qualifying child. Under the tie-breaker rule, the child is treated as a qualifying child:

• The parent, if only one of the persons is the child's parent,
• The parent with whom the child lived the longest during the tax year, if two of the persons are the child's parent and they do not file a joint return together,
• The parent with the highest AGI if the child lived with each parent for the same amount of time during the tax year, and they do not file a joint return together,
• A non-parent, if no parent claims the child as a qualifying child although he or she may do so and only if the non-parent's AGI is higher than the highest AGI of any parent who may claim the child, or
• The person with the highest AGI, if none of the persons is the child's parent.

This information is found in Publication 501, Dependents, Standard Deduction, and Filing Information.


Also, FYI "He is being told" is an unhelpful statement in most cases. Generally, it is necessary to know who is telling someone something in order to assess it's credibility.

Advising someone to just "go and file" attempting to thwart the other parent is very bad advice in most cases.

I agree with the previous advice that it might be in the parties' best interests to file a joint return for 2023. However, that would mean that they would have to agree ahead of time as to exactly how any refund (if any) would be shared.

 

[kaitan692]

In the absence of an order from a court or legal agreement stating the tax implications, the IRS usually applies the "custodial parent" standard. The custodial parent, who normally remains with the child for the majority of the year, is able to claim the child as a dependent.

If there is no court order yet, your buddy may have difficulty claiming the children without an agreement. Filing separately may affect prospective tax benefits and credits. It is recommended that he engage with a tax professional or an attorney to further understand the specifics of his case and explore legal options for protecting his rights and financial interests.

 

[LdiJ]

In the absence of an order from a court or legal agreement stating the tax implications, the IRS usually applies the "custodial parent" standard. The custodial parent, who normally remains with the child for the majority of the year, is able to claim the child as a dependent.

If there is no court order yet, your buddy may have difficulty claiming the children without an agreement. Filing separately may affect prospective tax benefits and credits. It is recommended that he engage with a tax professional or an attorney to further understand the specifics of his case and explore legal options for protecting his rights and financial interests.

Most family law attorneys are not well versed in taxes and would not be appropriate persons to consult with on tax issues. A tax professional could be helpful.

 

[Taxing Matters]

Most family law attorneys are not well versed in taxes and would not be appropriate persons to consult with on tax issues. A tax professional could be helpful.

I see no mention of any specific type of attorney in kaitan692's reply. It could have been a reference to tax attorneys. Some people really only think of CPAs or the big tax prep chains when they hear the term "tax professional". I'm guessing that's why kaitan692 mentioned attorneys separate from tax professionals. After all, taxes are (unfortunately for me) not something most people associate with a lawyer.

 

[Taxing Matters]

I agree that a joint return is very likely going to result in the least amount of tax compared to the tax on two married filing separate returns added together. The IRS now will split refunds so the old worry of one soon to be ex spouse just taking all the refund isn't an issue anymore, at least for those who know that the IRS can do it. It does require cooperation between the two to get it done, and hopefully they are cooperating on the financial matters. Having to consult professionals for every dispute over money adds up, and that's money that neither spouse will get.

If a tax professional is needed, I'd recommend either an enrolled agent or CPA. A tax lawyer could easily answer it too, but they also tend to charge more than other tax pros. You don't want to overspend on professionals while hashing out financial matters in a divorce.

 

[Taxing Matters]

Can there be a legal repercussion to him filing married separately and claiming at least one if not both of the kids?

I didn't address this in my earlier post. The answer is that most commonly the ex-spouse whom the IRS determines does not meet the requirements for the child related deduction or credit has his/return adjusted to reflect the disallowed deduction/credit, interest will be added, and quite likely the ex-spouse may get charged a penalty of 20% of the amount of the adjustment, too. It's better to simply make sure you meet the requirements to avoid that possible problem.

 

[LdiJ]

I didn't address this in my earlier post. The answer is that most commonly the ex-spouse whom the IRS determines does not meet the requirements for the child related deduction or credit has his/return adjusted to reflect the disallowed deduction/credit, interest will be added, and quite likely the ex-spouse may get charged a penalty of 20% of the amount of the adjustment, too. It's better to simply make sure you meet the requirements to avoid that possible problem.

Yep...the IRS will make him pay back any refund he got due to the children (if it's determined that he shouldn't have claimed them) plus penalties and interest on top of that. It is definitely not worth it. If he has the right under the IRS rules to claim the children, he can claim them. If he does not have the right under the IRS rules, he cannot. There is no ambiguity or "first come, first serve" situations.