You receive a tax break for your dependents, the people you support. To be considered a dependent for tax purposes, the individual must live with you, you must provide over half of his support, and he can't earn more than $3,700 during the year. Dependents can be either children or adult relatives. The IRS will not accept and process your tax return if someone else who already filed a return claimed any of your dependents. Provided you can prove that you are responsible for the individual in question, you can straighten out the situation with the IRS and receive the tax break you're entitled to.
Sending tax returns to the IRS through the mail was once the standard way Americans filed their taxes. Today, more people file their returns electronically. Not only is electronic filing or “e-filing,” quicker, it allows you to catch problems that could result in filing errors or an incomplete return. If someone else has already filed a tax return for the year and claimed your dependent, the IRS won't accept your return when you attempt to e-file it. Instead, it will provide you with one of several error codes and explain the reason your return was rejected. If you file your return by mail, the IRS will hold the return without processing it and notify you of the problem via mail.
Fixing the Error
When you claim a dependent, the IRS gives you credit for that dependent automatically and no one else can claim that person as a dependent for the year. Thus, if someone else already received credit for the individual, e-filing your return is no longer possible. You must prepare and print out a paper copy of your tax return. Write a cover letter for the IRS explaining that you are filing by mail because someone else incorrectly claimed one of your dependents and explain how that person qualifies as a dependent. If, for example, you are claiming your grandmother, note that she lives in your home and you provide over half of her support. If you have any documentation supporting your claim, you can make copies and include the documentation with your cover letter.
Once the IRS receives your return, it will evaluate your claims and compare your information to that of the individual who originally claimed your dependent. In most cases, the IRS will find and fix the error, and you do not need to take further action. The IRS will not tell you who originally claimed your dependent. If the other individual's claim was not a simple error, such as a typo when entering dependents' Social Security numbers, the IRS has the right to audit both you and the individual who originally made the claim to determine which of you is legally entitled to claim the dependent.
Many situations which involve two people claiming the same dependent involve the children of divorced parents. After a divorce -- especially in situations that involve joint custody arrangements -- both parents may legitimately believe they have the right to claim the child as a dependent. Although the IRS has the right to audit both parents, it generally looks not at the amount of financial support each parent provided but at the amount of time the child lived with each parent. If the child lived an equal amount of time with each of his parents, the IRS will permit the parent with the higher adjusted gross income to claim the child as a dependent
- IRS: Personal Exemptions and Dependents
- NBCNews.com: Taxes – E-filing Becomes the New Normal
- TurboTax: TurboTax Support – E-file Rejection Errors
- TurboTax: What To Do If Your Tax Return is Rejected By the IRS
- RapidTax.com: “Someone Else Claimed My Dependent” – How to Straighten Things Out
- Kiplinger: Divorce and Dependents – Who Claims the Kids?
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