Preparer

[dlh]

Situation: my client is in a legal divorce decree situation where he is permitted to file his return claiming a dependent for the child tax credit in each even numbered year, and his former spouse is legally able to claim the same dependent in each odd numbered year. My client's return (even numbered year) was rejected by the IRS due to the fact that another taxpayer (his former spouse) has already filed her return, claiming the dependent and the CTC for this year (even numbered year). My thinking is that my client needs to file a paper return, along with a copy of the divorce decree, which declares that he is allowed to claim the aforementioned dependent for this even numbered year 2022. I realize that the paper filing would not result in a quick solution. Has anyone dealt with this type of situation??

[TaxGuyBill]

The IRS generally does not care about a divorce decree. Is your client the Custodial Parent or the Noncustodial Parent?

[dlh]

My client is the noncustodial parent.

[TaxGuyBill]

Does your client have a signed Form 8332 from the Custodial Parent?

If so, you can either paper-file and include that, or e-file without the dependent and then amend to include the dependent (due to new rules, you MIGHT be able to e-file that amendment).

If your client does not have the signed Form 8332, your client needs that. If the Custodial Parent won't give that to your client, then your client may need to talk to his divorce attorney and/or go back to court to get the signed 8332.

[dlh]

My client has a signed form 8332 and this form was transmitted as an attachment with his e-filed return..

[Lion]

Do what TaxGuyBill said.

[kathyc2]

I would first have client talk to the ex. It may have just been an error. If ex pays client the amount he missed out of by not claiming, problem solved.

[dtlee]

While I believe that this discussion accurately reflects the "normal" circumstance, there may be a slight difference when the child has reached the age of majority under local law.

Twice since the new definition of a Qualifying Child went into effect, I have informed clients that they cannot file Form 8332 if the child has reached the age of majority prior to the middle of the year. In both cases the child reached this age the previous year and was currently a full-time student in college. I have one client who is getting threatening letters from her ex because I told her that she is the only one who can legally claim her son. The fact that the child is her Qualifying Child does not mean that she is able to sign Form 8332 assigning these benefits to the other parent.

Please see 1.152-4 Examples 6 and 7 and let me know if you believe I interpret these incorrectly.

[Rapid Robert]

See Pub 501, easier to read than the regs.

"Emancipated child. If a child is emancipated under state law, the child is treated as not living with either parent. See Examples 5 and 6."

In short, ":custodial parent" becomes undefined once the child is emancipated and Form 8332 does not apply. Somewhat confusingly, however, you still need to confirm that a qualifying child lived with the taxpayer for more than half of the year, but you don't necessarily do it by "counting nights".

Because in the OP the Child Tax Credit is in question, I think it's safe to assume the child is still a minor.

[TaxGuyBill]

Yeah, I agree with the Age of Majority thing (age 18 in my state). I'm dealing with a client right now on that matter.