Dependents?

[MargaretMort]

Clients have had two children as members of their household since 1/11/08. They are not foster children, according to paperwork but are under protective supervision by the Court with the Department of Children and Families--this is in FL.--and were placed in the care and custody of my clients. The clients were told the state can't sever the ties with the mother. The mother is not a blood relation of either client--step-cousin, in fact.

I thought they could be considered dependents under the qualifying relative--any other person who lived with the taxpayer all year as a member of the TP household , etc. The state does not pay clients to care for these children, does pay Medicaid but that is it.

Just want to be clear in my mind that they can be claimed as dependents--oh, they are now 1½ and 2½ in age.

Thanks for helping my mind be clear on this.

[kcjenkins]

Too bad, but 1/11/08 means they were 10 days shy of being with her the full year. But they will qualify for 09, if they stay with them all this year. Now, if they were WITH them by Jan 1, just not 'official' until 1/11, that would be different.

[jainen]

>>the state can't sever the ties with the mother<<

Severing the parental relationship is NOT a factor in foster care; it would result in a guardianship instead. It doesn't matter what "the paperwork" calls it. The important thing is the relationship and how it is treated under the tax code. These children were placed by child welfare officials, which is the definition of qualified foster care under Section 152. As such they are treated just like natural children. Their main home was with the taxpayer for more than six months, so they are dependents through the qualified child rules.

[schirallicpa]

Yes - I would treat them as dependents

[MargaretMort]

I believe the children were actually with my clients before 1/1/08 but not officially so. I felt they should be able to claim them as dependents but should doesn't always cut the mustard. Thanks for helping my thought processes. MM

[RoyDaleOne]

See:

http://www.irs.gov/newsroom/article/0,,id=133298,00.html

In general, to be a taxpayer’s qualifying child, a person must satisfy four tests:

Relationship — the taxpayer’s child or stepchild (whether by blood or adoption), foster child, sibling or stepsibling, or a descendant of one of these.

Residence — has the same principal residence as the taxpayer for more than half the tax year. Exceptions apply, in certain cases, for children of divorced or separated parents, kidnapped children, temporary absences, and for children who were born or died during the year.

Age — must be under the age of 19 at the end of the tax year, or under the age of 24 if a full-time student for at least five months of the year, or be permanently and totally disabled at any time during the year.

Support — did not provide more than one-half of his/her own support for the year.

Eligible Foster Child – Eligible foster child. An eligible foster child is an individual who is placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction.

[BulldogTom]

Dependency is not the issue here. The issue is qualifying child versus qualifying relative. The first comes with all the goodies (HOH, CTC, EITC, etc.) and the latter only gets you a dependency exemption.

As jainen pointed out, they become qualifying children when the court or agency places them in the home and they stayed there for 6 months.

Take all the credits that come with it.

Tom

Lodi, CA

[Terry D EA]

Agree with Bulldog Tom and Jainen. Take the credits.

Terry D.