Significance

• Taxpayers are allowed to claim exemptions on their tax returns for themselves, their spouse and their eligible dependents. For 2010, an exemption reduces a taxpayer's taxable income by $3,650. Each dependent can only be claimed once per tax year.
  
  

Filing

• Electronic filing simplifies the tax process because it verifies much of the return information before it submits it to the IRS. One aspect of this verification system checks Social Security numbers listed on your return against those that have already been filed on another filer's return. Your return will be rejected if you attempt to e-file and your ex has already claimed your son on the return. The e-file software will usually send you a rejection email acknowledgment with a code of 0507, indicating that the Social Security number of your dependent has already been filed.
  
  

Remedies

• If your ex claimed your son in a year where you were eligible to claim your son, then you need to file a paper return. Just print out your online return and mail it into the IRS for processing. Include with your return Form 8332 as well as a divorce or separation decree that outlines the eligibility guidelines for claiming your child's exemption. The IRS will then initiate an investigation to determine which party, you or your ex, is eligible to claim your son on the return. Keep in mind, though, that this investigation could delay the processing of your return. The general processing time frame for mailed returns is six to eight weeks versus 10 days for e-filed returns.
  
  

Considerations

• Should you find yourself in a position where you are not sure whether you or your ex has the right to claim your son, then you will need to use the IRS tiebreaker test. Your son's exemption will be given to the person who is his birth parent unless both filers are his birth parent, in which case the exemption will be granted to the person with whom the son lived with the longest. If your son lived with both of you for equal lengths of time, then the exemption will be given to the parent with the highest adjusted gross income.