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Can I claim my child and step-child if my wife and I are filling "Married Filing Separate?

Forum|Forum|6 years ago
June 1, 2019
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I am recently married and my wife is receiving assistance with student loans, for this reason we must file "Married Filing Separate". We both have one child from a previous marriage and this year we both have the right to claim them on 2015 taxes (as stated in the divorce decree). My question is, can I claim them both (natural child and step-child) and she claims none? or am I only allowed to claim my natural child and she hers?

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Best answer by SusanH

Yes, if you are otherwise qualified to claim the children as dependents, then you may claim them on your tax return. If are ever unsure, you can go thru the steps at the IRS webpage Who is my dependent?.

You should consider all the things SweetieJean mentioned as well as being aware of all the credits that are reduced or lost when you file Married Filing Separately instead of Married Filing Jointly.

The following come from Tax Products IRS Tax Map 2015

If you choose married filing separately as your filing status, the following special rules apply. Because of these special rules, you usually pay more tax on a separate return than if you use another filing status you qualify for.

Your tax rate generally is higher than on a joint return.
Your exemption amount for figuring the alternative minimum tax is half that allowed on a joint return.
You cannot take the credit for child and dependent care expenses in most cases, and the amount you can exclude from income under an employer's dependent care assistance program is limited to $2,500 (instead of $5,000). However, if you are legally separated or living apart from your spouse, you may be able to file a separate return and still take the credit. For more information about these expenses, the credit, and the exclusion, see Pub 17, chapter 32.
You cannot take the earned income credit.
You cannot take the exclusion or credit for adoption expenses in most cases.
You cannot take the education credits (the American opportunity credit and lifetime learning credit) or the deduction for student loan interest.
You cannot exclude any interest income from qualified U.S. savings bonds you used for higher education expenses.
If you lived with your spouse at any time during the tax year:
1. You cannot claim the credit for the elderly or the disabled, and
2. You must include in income a greater percentage (up to 85%) of any social security or equivalent railroad retirement benefits you received.
The following credits and deductions are reduced at income levels half those for a joint return:
1. The child tax credit,
2. The retirement savings contributions credit,
3. The deduction for personal exemptions, and
4. Itemized deductions.
Your capital loss deduction limit is $1,500 (instead of $3,000 on a joint return).
If your spouse itemizes deductions, you cannot claim the standard deduction. If you can claim the standard deduction, your basic standard deduction is half the amount allowed on a joint return.

For those who may still feel they need to file separately because they or their spouse owes a debt that results in the IRS offsetting (keeping) their tax refund to pay the bill, review the Injured Spouse information here -> IRS Injured Spouse Info and here -> Injured Spouse in TurboTax

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S

SusanHAnswer

Yes, if you are otherwise qualified to claim the children as dependents, then you may claim them on your tax return. If are ever unsure, you can go thru the steps at the IRS webpage Who is my dependent?.

You should consider all the things SweetieJean mentioned as well as being aware of all the credits that are reduced or lost when you file Married Filing Separately instead of Married Filing Jointly.

The following come from Tax Products IRS Tax Map 2015

If you choose married filing separately as your filing status, the following special rules apply. Because of these special rules, you usually pay more tax on a separate return than if you use another filing status you qualify for.

Your tax rate generally is higher than on a joint return.
Your exemption amount for figuring the alternative minimum tax is half that allowed on a joint return.
You cannot take the credit for child and dependent care expenses in most cases, and the amount you can exclude from income under an employer's dependent care assistance program is limited to $2,500 (instead of $5,000). However, if you are legally separated or living apart from your spouse, you may be able to file a separate return and still take the credit. For more information about these expenses, the credit, and the exclusion, see Pub 17, chapter 32.
You cannot take the earned income credit.
You cannot take the exclusion or credit for adoption expenses in most cases.
You cannot take the education credits (the American opportunity credit and lifetime learning credit) or the deduction for student loan interest.
You cannot exclude any interest income from qualified U.S. savings bonds you used for higher education expenses.
If you lived with your spouse at any time during the tax year:
1. You cannot claim the credit for the elderly or the disabled, and
2. You must include in income a greater percentage (up to 85%) of any social security or equivalent railroad retirement benefits you received.
The following credits and deductions are reduced at income levels half those for a joint return:
1. The child tax credit,
2. The retirement savings contributions credit,
3. The deduction for personal exemptions, and
4. Itemized deductions.
Your capital loss deduction limit is $1,500 (instead of $3,000 on a joint return).
If your spouse itemizes deductions, you cannot claim the standard deduction. If you can claim the standard deduction, your basic standard deduction is half the amount allowed on a joint return.

For those who may still feel they need to file separately because they or their spouse owes a debt that results in the IRS offsetting (keeping) their tax refund to pay the bill, review the Injured Spouse information here -> IRS Injured Spouse Info and here -> Injured Spouse in TurboTax

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S

SweetieJean

Before you decide to file Separately, consider these:

(1) Although she may save on her student loan repayments, both you and she will likely owe more in income taxes..

(2) Income-based student loan repayment plans can last 20 years or more, and your tax situation is likely to change in the meantime.

(3) There are special issues when filing Married Separately in a Community Property State.

That being said, I believe you claim your stepchild if the he/she lives with you, although the child's other natural parent might object. However, if your natural child does not live with you, then that child's other parent must provide you with a signed Form 8332 (regardless of what the divorce decree says).