EXEMPTIONS, CHILD TAX CREDIT EARNED INCOME CREDIT ETC

[ICOUNT]

I don't usually get this situation. Have a client rents a 3 bedroom apartment--lives the entire year with girl friend, her 2 children ( not his ) girl friends mother and girl friends ex husband. He is the only one that works. He claims he supports the clan. He wants to claim the children as exemptions which I think he can do----since they lived with him the entire year. He didn't say anything about the girl friend or ex husband ( Public Policy issue). The grand mother does get a small pension. It is my understanding that he could not get the child credit ($ 1000 each ) or qualify for the earned income credit since the children must be related even though they live with him the full year. I do believe he can claim the exemptions though. Am I right on this Also I think he can file as head of household.---These returns are the most difficult.

Thanks

[Don in Upstate NY]

Have a client rents a 3 bedroom apartment--lives the entire year with girl friend, her 2 children ( not his ) girl friends mother and girl friends ex husband. He is the only one that works. He claims he supports the clan. He wants to claim the children as exemptions which I think he can do----since they lived with him the entire year. He didn't say anything about the girl friend or ex husband ( Public Policy issue). The grand mother does get a small pension. It is my understanding that he could not get the child credit ($ 1000 each ) or qualify for the earned income credit since the children must be related even though they live with him the full year. I do believe he can claim the exemptions though. Am I right on this Also I think he can file as head of household.---These returns are the most difficult.

Your client wants to claim the kids, but they are not related to him. He can claim them as qualifying relatives as long as they all lived in the same household for the entire year and no other taxpayer can claim the kids as qualifying children. If all the facts are accurate, then neither the girl friend nor her ex are required to file tax returns, nor would they have any reason to. Assuming they did not file, then they are not "taxpayers" within the meaning of the term as defined by the latest version of the qualifying child criteria.

Now, what about grandma? How "small" is her pension? If she is required to file a return, or actually does file one to get some credit, then the kids become her qualifying children (even if she doesn't claim them) and your client is out of luck. If grandma doesn't file, then she also is not a "taxpayer" and your client is free to claim the kids (and his GF and her ex, and maybe even grandma too, for that matter) as his dependent qualifying relatives.

Qualifying relatives don't entitle him to EIC or the child credit, and non-related qualifying relatives also don't qualify him to file as Head of Household.

{With a 3 bedroom apartment, if the ex and grandma don't cohabitate, does that mean that the happy couple have to share a room with the kids? }