My ex-mother-in-law was awarded custody of my three kids in October 2018. They've lived with her since Aug. 16, 2018. No mention of taxes was in the custody order or brought up in court. Can she claim them on her 2018 taxes?
The tax benefits related to children have changed for 2018. Now, a credit is available instead of a personal exemption. However, the rules regarding how dependent children qualify for the benefits have not changed. To claim a child credit, one of the rules is that the child (or grandchild in this case) must have lived with the person claiming them for more than half the year, unless a divorce agreement indicates which spouse can claim the credit. In this case, since the kids have only lived with your ex-mother-in-law for 4 1/2 months, she would not be able to claim the child tax credit for them for 2018 since the custody agreement was silent on the tax benefits.
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Answered by: Susan E. S. Howe, CPA, is principal of Howe Advisory in Strafford, Pa.