Legal Question in Family Law in California

It is illegal to claim a tax deduction for child support payments that you do not make. The grandparents are clearly acting illegally unless they provide at least 50% of her lving expenses. You do not need your wife's approval, unless so stated in the divorce decree or settlement papers, to claim your daughter as a dependent if you provide 50%+ of her support. You can not use the grandparent's income if they are not in fact supplying any support.

Mr. Shers is right. In addition, she should be subject to either a find work order, or imputed income, or both. You need to go in for a modification of your support order to clarify that you get the deduction, and that she must find work or support will be based in imputed income.

It's not illegal to claim a child as a dependent if she is a dependent on the grandparents. If she lives in their home, I would certainly say she was a dependent. If you don't agree, you will have to go back to court to modify the terms of the support order that was part of the judgment.