My son tells me he stays with his grandma and his father stays and his wifes home. He really hasnt lived anyplace for more than half of the year.

If you are not responsible for at least half of your son's care, you should not claim him as a dependant on your return. The disappointing part is that perhaps nobody is sharing that part, therefore it's as if nobody is caring for him. However, this is just from my perspective of IRS law.

However, you might be able to deduct some expenses that he has, or deduct a gift of cash to help him out. But talk to your tax preparer to see if you are able to do that first - you can only do this if you 'itemize your deductibles' as opposed to taking the standard deduction on your 1040 tax return.

In the case of divorced, separated or never married parents, the rules about support get a little confused. Neither parent has to provide more than half of the child's support, as long as no other person or organization contributes more than the two parents, combined. So between your child support, and the value of the lodging in his father's house (when he was there), it sounds like one of the parents can claim the child as a dependent.

But which?

The stepmother, if she files jointly with your ex, will probably have the closest thing to a claim on the dependency. Though you cannot show that she herself paid his support, your son lived some number of months in that household, and the IRS doesn't care which member of a joint return contributed the income. If stepmom chooses not to file with her husband, then she wouldn't meet the support test and wouldn't have a claim on the dependency.

None of the expenses or support that you paid for him are deductible on your personal taxes, unless he qualifies as your dependent. Since he didn't live with you, your son would not qualify you for Head of Household filing status or the Earned Income Tax Credit.

Whomever has the child the "majority" of the year is entitled to file the child on their Income Tax for that year. In this case it sounds like the Grandparent has that right, because he didn't live with you. However if the Grandparent agrees, you can put him on your income tax if you've helped pay for his well being while he was under their care. I would make the courts aware of the new living arrangements of your son, so this is documented come income tax time. And keep all receipts of anything you by for him, clothes food, personal items, school trips etc..

The grandmother works for the Indian reservation, under the table so she does not file an income tax return.

Just because the grandmother works for cash doesn't mean she can't choose to do the right thing with her next tax return and declare that income as self-employment which would allow herself to benefit from claiming her grandchild as a dependent.

If I were you, I wouldn't simply claim him without having his father give you a form 8332, allowing a non-custodial parent to claim a child who does not live with them. You could be in for a nasty surprise from the IRS if the grandmother or his father/stepmom claim him as well as you. Part of the penalty for that kind of frivolous claim/tax fraud is you could lose your right to claim the EIC on ANY return for several years if you attempted to claim it for a child who did not live with you, including not being allowed to claim the EIC on your other child. Not really worth it.

Have his father sign off on this form if you're going to claim him. It will save you a lot of potential trouble: http://www.irs.gov/pub/irs-pdf/f8332.pdf