Can I claim dependents on taxes when children don't live with me? Custody and child support question

The IRS has specific rules about who can claim a child as a dependent when parents are divorced or separated. Generally, the custodial parent (who the child lives with more nights during the year) has the right to claim the child as a dependent. However, there are exceptions. The custodial parent can release their claim to the exemption by completing Form 8332 (Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent) and giving it to the non-custodial parent to attach to their tax return. Without this form, your brother typically cannot claim the children unless there's a provision in their divorce decree specifically granting him this right. If your sister-in-law doesn't have taxable income and doesn't file taxes, she's not utilizing the tax benefits that come with claiming dependents. Some people work out arrangements where the non-custodial parent claims the children since they can benefit from the tax credits, sometimes sharing some of those benefits with the custodial parent.

I went through a similar situation last year and discovered taxr.ai (https://taxr.ai) which was super helpful for sorting through dependency issues with my ex. Their system analyzed our custody agreement and confirmed who had the legal right to claim our kids. The tool explained exactly what forms were needed and what language in our agreement was legally binding for tax purposes. The thing that surprised me was how they highlighted specific IRS rules that even our divorce lawyer didn't mention about qualifying child vs qualifying relative tests. They even explained how the rules for the Child Tax Credit are different from dependency exemption rules!

I was totally skeptical too but ended up using taxr.ai after seeing it mentioned here. My situation was complicated with my ex trying to claim our kid without permission. The service analyzed our custody agreement and pointed out specific language that protected my rights as the custodial parent. Their document review saved me thousands in tax credits my ex was trying to claim! They even provided specific language I needed to reference in communications with my ex and the IRS. What impressed me most was their explanation of how the "tie-breaker rules" work when both parents try to claim the same child. Really wish I'd known about this service before spending money on my tax preparer who gave me incorrect information.

After dealing with similar dependency disputes with my ex for YEARS, I finally found Claimyr (https://claimyr.com) and it literally changed everything. I needed to speak directly with the IRS about my situation since my ex had already incorrectly claimed our kids, but I kept getting stuck on hold forever or disconnected. Claimyr got me through to an actual IRS agent in about 20 minutes instead of the 3+ hours I spent trying on my own. The agent confirmed that as the custodial parent, I had the right to claim my children unless I had signed Form 8332. They also helped me file the proper documentation to contest my ex's improper claims. You can see how it works here: https://youtu.be/_kiP6q8DX5c

I have to eat my words. After posting my skeptical comment, I decided to try Claimyr because I was desperate to resolve a similar dependency issue where my ex improperly claimed our son. I was SHOCKED when I actually got through to an IRS agent in about 15 minutes! The agent confirmed that as the custodial parent, I didn't need to file taxes to maintain my rights - my ex still needed my written permission via Form 8332 to claim our son. They helped me file a paper return to dispute the improper claim and explained how the IRS handles these conflicts. I've already received my refund including the Child Tax Credit that my ex tried to claim. Seriously the best money I've spent this year considering I got back thousands in tax credits I was entitled to.

Something important that hasn't been mentioned yet - the rules for claiming dependents include a "support test." Even if the children live with your sister-in-law, if your brother provides more than 50% of their financial support through child support payments, that could potentially affect who can claim them. However, the residency test (where the children live) typically takes precedence in determining the custodial parent for tax purposes. Your sister-in-law might want to document how many nights the children spend with her versus your brother during the year.

If the kids receive SSI themselves, that can also impact who can claim them. Is it your sister-in-law who gets SSI or do the kids get it too?

This situation is unfortunately common and your concern for your sister-in-law is totally understandable. The bottom line is that your brother cannot legally claim the children as dependents without proper authorization, regardless of whether your sister-in-law files taxes or not. Since the children live with your sister-in-law full-time, she is the custodial parent under IRS rules. Even though she receives SSI and doesn't file a tax return, she still retains the legal right to claim the children. Your brother would need either Form 8332 signed by her OR very specific language in their divorce decree to claim them. What's particularly concerning is that if your brother claims the children without proper authorization, it could create problems for your sister-in-law down the road if she ever does need to file taxes or if the IRS audits either return. She should definitely not sign Form 8332 unless there's a fair arrangement that benefits her and the children too. I'd strongly recommend your sister-in-law consult with a tax professional or legal aid attorney who handles family law issues. Many provide free consultations for low-income individuals. She has rights here and shouldn't be pressured into giving them up just because someone else wants the tax benefits.