Who claims baby next year?

Question

Okay my sister had a baby february.My sister and her daughter lived with grandparents and planning to stay with them until next year. They provide her with a housing , food, diapers, and sometime formula.Grandpa paid for the delivery. Now the father never paid a dime, until now he is giving her 20 dollars a week and some times 50 dollars for the child. He is saving receipts because he says he is going to claim the child next year for the taxes.Who has the right to claim child? The grandparents, or father?

Answer 1

If the father doesn't live with the baby he can't claim her unless the mom gives him written permission, in which case the grandparents should be pretty ticked off at their daughter, and should give her the privilege of earning her own way from then on!

Since the baby lived with both the mom AND the grandparents, either can legally claim her - they can agree between themselves who will claim her.  If they can't agree, the mom has first claim.

If the father and the grandparents both claim her, then the IRS will investigate and the father (assuming the mom didn't give him the written permission) will have to pay back anything he got from claiming her, plus interest and penalties.  If both try to claim her, the second one to file will have to file by mail, since an efile claiming her would be rejected.

The father paying child support, even if it were much more than he is paying, gives him no legal right to claim the baby on his tax return.

Answer 2

chuck norris knows where carmen sandiego is

Answer 3

Generally this is determined with the parties and a lawyer. Don't really think the grandparents will have a claim but the mother will. the only way the grandparents will be able to claim the child is if the mother of the child can also be claimed by the grandparents

Answer 4

See page 28 of IRS Publication 17 at http://www.irs.gov/pub/irs-pdf/p17.pdf

There are multiple hypothetical scenarios (including Table 3-2) in the section titled "Special Test for Qualifying Child of More Than One Person", at least one of which should fit the situation you've described.

Also, pages 26 and 27 of the same IRS publication provide information to guide you to the correct answer.

Answer 5

The person providing more than 50% of the child's needs, In this case Grandpa. 

Answer 6

If the mother and father of the child together do not provide for over half the support of the child, neither of them can claim the child as a dependent.  The grandparents would be the only taxpayers eligible to claim the child.

However, if the mother signs over Form 8332 to the father, and the father claims the child, the IRS will probably accept this.  The grandparents could challenge this and might win if they can prove that the parents did not provide over 50% of the child's support.

But if the mother takes no action, the grandparents can claim the child and the father cannot.  The grandparents should make every effort to file their tax returns as soon as possible next January to avoid having to go through a dispute with the father.

Answer 7

Tell your sister to get IRS publication 501.

There are 3 scenarios for next year.

1.  Your sister, the mother, claims the baby.  If she claims the baby, she "wins" as she is a biological parent and met the qualifying child tests.

2.  If your sister doesn't claim the baby, your paretns can.  As they too, meet the qualifying child tests.

3.  Your sister signs a form 8332 and gives it to the father.  This form won't be valid UNLESS he can prove he and the baby's mother provided more than half of the baby's support.  Given the amounts you've mentioned, he won't be able to do it.  (1/4th of the housing/food costs of your parents' home is part of the baby's support.)

With a valid form, he gets the exemption and child tax credit.  Without the form, as a non-custodial parent, he gets nothing.  

It's not unusual for both the father and the grandparents to claim the baby, both claiming her as a qualifying child.  Then the IRS will get involved.  The father will lose and will be barred from claiming EIC for 2 years.  (Failing to read the requirements for claiming a dependent is enough to get him a 2 year ban.)