Few things can disrupt your tax filing like finding out someone else has already claimed your child on their return. Whether it’s the result of a simple mistake or a contentious custody situation, this issue can cause delays, lost refunds, and plenty of stress. Understanding what happens in these situations, and how to resolve them, is critical for getting your tax return back on track.
Common Reasons This Happens
When more than one person attempts to claim the same child on their tax return, the cause is usually one of a few recurring scenarios—some unintentional, others more complex.
Misunderstandings
In many cases, someone else claiming your child may simply be the result of an honest mistake. A grandparent, relative, or even an ex-spouse might believe they are eligible to claim the child based on past arrangements or outdated agreements. Sometimes, two people alternate years claiming the same child, and one person may accidentally claim them during the wrong year.
Custody Disputes
In other instances, the situation is more complex. Parents who are separated or divorced might disagree on who has the right to claim the child. Even if a legal agreement is in place, one party may disregard it and file the return anyway. They may do this assuming they can sort it out later.
There are also more serious cases where someone intentionally claims a child they are not eligible for. For example, they may want to boost their refund through the Child Tax Credit or Earned Income Tax Credit. This is considered tax fraud and can carry penalties.
Overlapping Support
Another reason this happens is when multiple people financially support or house a child throughout the year. For instance, let’s say a child splits time between a parent and a grandparent. Each may believe they meet the IRS requirements to claim the child even though only one is entitled to.
How the IRS Handles Duplicate Claims
Once the IRS system detects that more than one return has claimed the same dependent, a series of automatic and manual processes are triggered to flag and investigate the issue.
E-file Rejection
If someone has already claimed your child, and you attempt to file an electronic tax return claiming that same child, the IRS will reject your return. The system only allows one return per Social Security Number (SSN) for dependents. This rejection acts as a safeguard against duplicate claims. The IRS will not tell you who claimed the child due to privacy laws. However, you’ll know something is wrong if you receive a rejection notice related to a dependent’s SSN.
Filing a Paper Return
When your e-filed return is rejected, the next step is to file your tax return by mail. By submitting a paper return that claims the child, you are asking the IRS to investigate the situation. You will need to complete your return as usual and ensure all supporting documents are attached. Once the IRS receives your paper return, they will compare it with the previously filed return that also claimed the child.
IRS Review and Audit
After receiving both returns, the IRS will begin a review process to determine who is entitled to claim the child. This review can take several months. During this time, the IRS may send letters to both parties requesting documentation to support their claim. If both parties continue to claim the child and no resolution is reached, the IRS may initiate an audit. In this case, both individuals must provide proof that they meet the IRS requirements for claiming the child as a dependent.
IRS Final Decision
If both parties appear eligible or if there is no documentation to support either claim, the IRS will apply tie-breaker rules. These rules are based on relationship, residency, and income, which we’ll cover in more detail below.
How the IRS Determines Who Can Claim the Child
When two taxpayers claim the same child, the IRS follows strict eligibility rules and tie-breaker logic to determine who has the legal right to do so.
IRS Qualifying Child Requirements
To claim a child as a dependent, the IRS requires that the child meet specific criteria. The child must be your son, daughter, stepchild, foster child, sibling, half-sibling, or a descendant of any of them. The child must be under age 19 (or under 24 if a full-time student). They must also live with you for more than half the year.
In addition to the relationship and residency tests, you must provide more than half of the child’s financial support during the year. The child also must not file a joint return unless they are only doing so to claim a refund.
Tie-Breaker Rules in Contested Claims
If multiple taxpayers claim the same child, and neither withdraws their claim, the IRS will apply tie-breaker rules. Preference is given first to the parent if one is a parent and the other is not. If both are parents, the child goes to the one with whom the child lived the longest during the year. If the child spent equal time with both, the parent with the higher adjusted gross income (AGI) wins the claim.
For example, say a mother and grandmother both claim the same child, and the child lived with both for roughly equal time. The IRS would typically award the claim to the mother, assuming both meet other qualifications. If both are parents, and the child lived equal time with each, the higher-income parent wins the right to claim the child.
How Long Does It Take to Resolve?
The process of resolving a duplicate dependent claim is far from instant. It involves careful review, potential audits, and extended processing timelines.
Processing Time
The entire process of resolving a duplicate dependent claim can take several months. Once you submit a paper return, the IRS must manually review and compare it to the return that already claimed the child. This process is slower than normal tax return processing and may result in significant refund delays.
If the IRS requires additional documentation from you, they will send you a notice with specific instructions. Failing to respond to these notices in a timely manner can delay the process even further. It may also result in your claim being denied by default.
Refund Holds
While your case is being reviewed, your refund will be placed on hold. You can track the progress of your return using the IRS’s “Where’s My Refund?” tool, However, updates may be infrequent if the case is under special review or audit.
What If the Other Person Claimed Your Child Fraudulently?
If you suspect someone intentionally and fraudulently claimed your child to benefit from credits or a larger refund, it’s important to take action quickly.
Recognizing Tax Fraud
If you suspect that someone intentionally claimed your child to receive credits or inflate their refund, you may be dealing with tax fraud. This is common in situations where the person claiming the child has no legal right or relationship with the child. This might happen when a distant relative, acquaintance, or even someone with access to personal information uses your child’s SSN to claim a refund.
Reporting Fraud to the IRS
To report suspected tax fraud, you can file Form 3949-A with the IRS. This form allows you to provide as much information as possible about the person who may have filed a fraudulent return. The IRS does not provide updates on these investigations due to privacy laws. However, the report can trigger an internal review.
You may also contact the IRS Identity Protection Specialized Unit if you believe your child’s SSN has been compromised. In cases of identity theft, the IRS may assign you and your child an Identity Protection PIN (IP PIN). This will add security in future tax years.
Preventing This in the Future
Once you’ve experienced this issue, it’s natural to want to do everything possible to make sure it doesn’t happen again.
Communication and Legal Agreements
In many cases, issues like this can be avoided with clear communication and formal agreements. If you’re separated or divorced, make sure your custody and tax arrangements are clearly spelled out in a court order or divorce decree. If the decree allows you to claim the child, keep a copy on hand in case the IRS requests it.
File Early
Filing your tax return early each year can reduce the likelihood of someone else claiming your child before you do. The IRS processes the first return it receives, and any subsequent claims are flagged for review. Keeping thorough records of your child’s residency, support, and school attendance can also make it easier to resolve any disputes that arise.
Use an Identity Protection PIN
For added protection, you can request an Identity Protection PIN (IP PIN) from the IRS. This six-digit number must be entered on your tax return and prevents others from filing using your or your child’s SSN. IP PINs are renewed each year and can be requested through the IRS’s website.
Tax Help for Parents
Discovering that someone else claimed your child on their tax return can be frustrating. However, there is a clear process in place to resolve the situation. If your return has been rejected or delayed because of a duplicate dependent claim, act quickly, stay organized, and be prepared for the timeline involved. With the right documentation and persistence, you can correct the issue and ensure your child is properly claimed on your return. If you’re unsure what to do next or need help navigating the IRS process, getting professional tax help can make all the difference. Optima Tax Relief is the nation’s leading tax resolution firm with over a decade of experience helping taxpayers.
If You Need Tax Help, Contact Us Today for a Free Consultation