Tax Return Rejected - Grandparents Claimed My Child Wrongfully

This happens more frequently than you might think. As of January 15, 2024, the IRS has specific procedures for this exact situation. First, you'll need to file a paper return (since e-file was rejected) with Form 8862 attached. Include documentation proving you had custody: school records showing your address, medical records, child care receipts dated throughout 2023. The IRS will then review both claims and make a determination, which typically takes 6-8 weeks from the March 2024 processing backlog.

Do u have any court docs or custody agreement w/ the grandparents? If not, u need to gather proof ASAP! School records showing ur address, medical receipts, childcare pymts. The IRS deadline for resolving these disputes is approaching fast - u have like 3 wks max to get everything together and file paper return. Also check if ur state return was rejected too - diff process there!

Have you tried contacting the grandparents directly about this? Sometimes these situations are misunderstandings rather than intentional. Could they have claimed your child without realizing you were eligible as the custodial parent? Did they perhaps provide significant financial support that made them think they qualified? It's worth having that conversation before escalating to a full IRS dispute, wouldn't you agree? The IRS will ultimately side with whoever can prove the child lived with them for the majority of the year, but resolving this amicably might be faster.

Per IRC Section 152(c)(1)(B), the qualifying child must have the same principal place of abode as the taxpayer for more than half of the taxable year. Your documentation should focus on establishing this residency requirement. I recommend calling the IRS directly to start a dependent dispute case, but be prepared for extremely long hold times. My colleague recently used Claimyr (https://www.claimyr.com) to connect with an IRS agent in under 30 minutes instead of waiting for hours. They'll walk you through exactly what documentation to submit with your paper return and how to properly code it so it gets routed correctly.

Have you considered how this might affect your relationship with the grandparents long-term? I'm concerned about how this dispute might impact family dynamics, especially for your daughter. Do you think there's a way to approach this that preserves relationships while still getting what you're legally entitled to?

There's an important distinction between the Child Tax Credit and the status as a qualifying dependent. Did your e-file rejection specifically mention which tax benefit was being disputed? The Qualifying Child algorithm the IRS uses has a tiebreaker system that might come into play if multiple people could potentially claim the child.

I went through this exact nightmare last year when my ex's parents claimed my son. I remember on February 12th my return got rejected, and I was panicking. I gathered every single document I could think of - school records, medical bills, even grocery store receipts showing I bought children's items regularly. Filed by paper on February 28th, and then had to wait. I called the IRS twice in March to check status. Finally got my refund on May 15th, and they sent a notice to the grandparents requiring them to pay back what they incorrectly claimed. Stay strong and document EVERYTHING!