Consider for a moment this situation: you are the stepparent to your spouse’s children. During the course of the marriage, you are considered the main provider and therefore are entitled to the Head of Household status on your tax return. But during the course of a year, you and your spouse decide to get a divorce. In years past, you have claimed your stepchildren on your taxes; but because of your divorce, are you still able to claim them?
Some of our Washington readers might recognize this as the issue that was presented to the Tax Court in a case that was recently decided on. The issue came about because of a discrepancy the IRS discovered in a man’s 2011 tax filing. According to records, he had claimed his stepchildren on his return under the dependency exemption. But this was also the same year that he and his wife had finalized their divorce. It raised an important question for the Tax Court to answer: could a divorcee claim their stepchildren on their tax return?
According to the Tax Court, yes he could and for two reasons. The first is that, for purposes of filing joint taxes after a divorce, a person’s marital isn’t updated until the last day of the year. Because the divorce in this case was not finalized until November 2011, and up until that point he was the main provider, he could still considered married for filing purposes and could therefore claim Head of Household status on his return.
The second reasons had to do with the children and his relationship to them during the 2011 tax year. In order to claim the dependency exemption the man needed to have a specified relationship to the children. Among those listed by the IRS is a stepparent-stepchild relationship. And because his marital status would not change until the start of the next year, his relationship to the children remained the same as well.
It’s important to point out that because the man represented himself in this case, he did not have skilled legal counsel who could explain to him the complexity of his situation. Some of our Spokane readers might have chosen to do things differently, especially because the outcome could have been less favorable had the circumstances been a little out of the ordinary.
Source: Forbes, “Step Kids Remain Step Kids After Divorce,” Peter J. Reilly, June 23, 2014