Can Foster Parents Claim Foster Kids?
- The IRS allows you to claim your foster kids as dependents if you satisfy the remaining qualifying child requirements. Only after you establish that you cannot satisfy these requirements can you evaluate your eligibility under the alternative qualifying relative rules. The rules require that your foster child be under the age of 19 or under the age of 24, provided she is a full-time student at the end of the tax year. In addition, she must reside with you for more than half of the tax year and not contribute more than half of her own financial support. And in the event your foster child is married, the filing of a joint return with her spouse for any reason other than to obtain a tax refund will ruin your eligibility to claim her.
- If your foster kid isn't a qualifying child, you can still claim a dependency exemption for hm if he satisfies the qualifying relative requirements. Your foster kid isn't required to live with you for even one day during the tax year; however, you must provide more than half of his necessary financial support and he must not receive $3,650 or more of income that is subject to income tax. For purposes of calculating financial support, it includes most essential living expenses such as food, clothing, shelter, medical and educational expenses, transportation and reasonable amounts for entertainment. If your foster child doesn't live with you and pays his own rent and utilities, satisfying the support test absent some extenuating circumstances can be difficult. In addition, you cannot treat the funds you receive from a state agency to care for your foster kids as financial support that you provide.
- You are precluded by the IRS from claiming your foster kid as a dependent if another taxpayer is eligible to claim you as a dependent on his return. No requirement says that the other taxpayer actually must report you as a dependent since the IRS will enforce this rule even if the taxpayer chooses not to claim you but has the option to.
- The IRS places some restrictions as to who you can treat as a foster child for purposes of claiming her as a dependent. Regardless of how you choose to label your relationship with the child, the IRS will only acknowledge you as a foster parent if a legally authorized agency places the child in your care or she is there as the result of a judgment or other court order.
