Can Grandparents Legally Claim Grandchild as Dependent on Taxes?
Hey tax folks, I'm in a bit of a complicated situation with my daughter and grandchild. My husband and I have been financially supporting our 3-year-old grandson since he was born. Our daughter (his mom) lives with us but only works part-time at a retail job, making about $14,000 last year. She can barely support herself, let alone her child. We pay for 80% of our grandson's expenses - food, clothes, daycare ($8,500/year), medical bills, everything. Our daughter receives some government assistance but it's minimal. We're wondering if we can claim our grandson as a dependent on our taxes since we provide most of his support? Our tax preparer from last year said we couldn't because he's not our child, but I've been reading different things online. Something about a "qualifying relative" test? We're both still working (combined income about $73,000) and could really use the tax benefits since we're shouldering most of the financial burden. Would we qualify for any child tax credits or childcare credits? Does our daughter living with us complicate things? She filed her own taxes last year and claimed him, but we're the ones actually supporting him. Any advice would be super appreciated!
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Yuki Ito
What you're describing is exactly what the qualifying child and qualifying relative tests are designed for. Since your grandson lives with you and you provide more than half of his support, you may indeed be able to claim him. The IRS has specific rules for this. Your grandson would qualify as your "qualifying child" if he: 1) lives with you more than half the year, 2) is under 19, 3) doesn't provide more than half of his own support, and 4) isn't filing a joint return. Since he's your grandchild, he meets the relationship test. The tricky part is that if your daughter also meets these tests (which she might since she lives there too), then typically the parent gets priority to claim the child. However, she can choose to let you claim him by not claiming him herself. This would require her to sign Form 8332. You would potentially qualify for the Child Tax Credit and the Child and Dependent Care Credit for daycare expenses if you can claim him. These could be significant tax benefits given your situation.
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Ethan Taylor
•Thank you so much for the detailed explanation! I didn't know about the Form 8332. So if my daughter signs that form, we could claim our grandson even though she has priority as the parent? Would this be something we'd need to submit with our tax return? Also, with the Child Tax Credit - would we get the full amount? I think it's $2,000 per child, right? And for the childcare credit, can we claim the full $8,500 we paid for daycare?
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Yuki Ito
•Yes, if your daughter signs Form 8332, you can claim your grandson even though she has priority. You would need to attach this form to your tax return when you file. For the Child Tax Credit, you could potentially get the full $2,000 based on your combined income of $73,000, as the credit doesn't begin to phase out until much higher income levels. For the Child and Dependent Care Credit, you can claim expenses up to $3,000 for one qualifying individual. The credit itself is a percentage of those expenses based on your income, typically 20-35%. So you wouldn't get the full $8,500 back, but rather a percentage of $3,000.
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Carmen Lopez
I was in this exact situation a few years back with my daughter and granddaughter! Tax stuff was confusing until I found taxr.ai (https://taxr.ai) which helped me figure out all the dependent rules and qualifying child tests. I uploaded my documents and answered a few questions about our living situation, and it told me exactly how to handle claiming my granddaughter. The site analyzed our specific situation and confirmed I could claim her since I provided more than half her support. It even generated the Form 8332 for my daughter to sign and walked me through how to document all the expenses to prove support if the IRS ever questioned it. Saved me tons of stress and probably $3,000 in tax benefits I would have missed!
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AstroAdventurer
•Does this actually work for complicated family situations? My stepdaughter and her kid live with us but the father has partial custody. Would it handle something messy like that? I'm worried about triggering an audit if we both try to claim the same child.
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Andre Dupont
•I'm suspicious about these online tools. How does it know better than a professional tax preparer? Last time I used an online thing it messed up my taxes and I had to pay penalties. Did it actually help with the audit risk or just tell you what you wanted to hear?
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Carmen Lopez
•It absolutely works for complicated family situations. The tool asks detailed questions about custody arrangements, living situations, and support provided. It's designed to handle exactly these messy scenarios and gives you proper documentation to support your claim. The difference from a regular tax preparer is that it specializes in complex dependent situations and uses actual IRS rules and court cases to analyze your specific circumstances. It doesn't just tell you what you want to hear - it actually flagged areas where I needed more documentation and explained what would happen in an audit. It's not about replacing professionals but giving you the right information for your specific case.
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Andre Dupont
I need to admit I was totally wrong about online tools. After my skeptical comment, I decided to try taxr.ai just to prove it wouldn't work for my situation with my son and granddaughter (we have a weird custody situation with my ex-husband also involved). The tool actually identified a major mistake I was making! Turns out I was claiming my granddaughter incorrectly while also trying to file as head of household, which could have triggered an audit. It showed me exactly which forms to file and what documentation to keep. I ended up getting an extra $4,200 in credits I didn't know I qualified for. The dependent rules are SUPER confusing when grandparents are involved, but this cleared everything up. Wish I'd found this before paying my "expert" preparer who missed all this!
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Zoe Papanikolaou
After reading all these comments about grandparents claiming grandkids, I wanted to share something that saved me tons of stress. I kept calling the IRS to verify if I could claim my grandson (similar situation, daughter living with me, I pay most expenses), but I could NEVER get through to a human. I found this service called Claimyr (https://claimyr.com) that actually gets you through to a real IRS agent. You can see how it works here: https://youtu.be/_kiP6q8DX5c - I was skeptical but desperate after waiting on hold for 4+ hours across multiple days. It worked amazingly well! Got me through to an actual IRS agent in about 20 minutes who confirmed I could claim my grandson AND apply for retroactive credits for last year when I should have claimed him but didn't. The agent even noted my account so if there were questions later, there was a record of our conversation. Totally worth it when dealing with something as important as dependent claims.
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Jamal Wilson
•Wait, how does this even work? The IRS phone system is literally designed to keep people on hold forever. Is this some kind of scam or do they actually have some special way to get through? I've been trying to reach someone for weeks about my dependent situation.
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Mei Lin
•This sounds like complete BS. There's no way to "skip the line" with a government agency. I bet they just keep you on hold themselves and then connect you when you finally get through naturally. Total waste of money when you could just keep calling yourself.
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Zoe Papanikolaou
•It works by using technology that navigates the IRS phone tree and holds your place in line. It's not skipping the line - you still wait your turn, but their system does the waiting instead of you sitting with a phone to your ear for hours. They use a callback system, so once they've secured your place in line, they call you when an agent is about to be connected. The reason it works better than doing it yourself is they know exactly which prompts to use, which departments have shorter wait times, and what times of day are best to call. It's basically the difference between randomly calling versus having a strategic approach to the IRS phone system.
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Mei Lin
I have to publicly eat my words about Claimyr. After posting that skeptical comment, I was still desperate to talk to someone at the IRS about my grandchild dependent situation, so I figured "what do I have to lose?" You guys. IT ACTUALLY WORKED. I got a call back in about 25 minutes and was connected to an IRS agent who answered all my questions about claiming my grandson. Turns out I was eligible for the Additional Child Tax Credit from last year that I completely missed. The agent helped me understand exactly what documentation I needed to keep in case of an audit (especially important in my case since my daughter sometimes claims to friends that she "supports" her child when I'm actually paying for everything). I'm still shocked this worked after spending literally WEEKS trying to get through on my own.
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Liam Fitzgerald
Just wanted to add something important about grandparents claiming grandchildren that nobody mentioned yet. If you claim your grandchild, it might affect your daughter's eligibility for certain income-based assistance programs! This happened to my sister. She let her parents claim her child (they provided most support) but then she got dropped from her housing assistance because they looked at her tax return and saw she didn't claim her child. Make sure your daughter understands all the potential impacts before you make this switch. Also remember that whoever claims the child gets the stimulus payments if there are any new ones. During COVID, this was a big deal - thousands of dollars difference.
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Ethan Taylor
•Oh wow, I hadn't even thought about how this might affect her benefits! She currently gets some food assistance and healthcare. Do you know if there's any way to figure out how claiming our grandson would impact her eligibility? The last thing we want to do is help ourselves tax-wise but hurt her benefits.
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Liam Fitzgerald
•You should definitely contact the specific benefit programs she's enrolled in before making any tax decisions. Each program has different rules about how they verify household size and dependents. For some programs, they look beyond just tax returns to actual living situations, so they might still count your grandson as part of her household even if she doesn't claim him on taxes. Others strictly use tax returns for verification. I'd recommend calling each program (food assistance, healthcare, etc.) anonymously to ask how they determine household size and what documentation they require. Better to know in advance than to be surprised with a benefit reduction after tax time.
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GalacticGuru
Has anyone dealt with a situation where the biological parent (not living with the grandchild) tries to claim the child even though the grandparents provide all the support? My daughter's ex keeps claiming their child on his taxes even though our grandson lives with us full-time and he provides zero support. IRS rejected our return because someone else claimed him with his SSN.
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Yuki Ito
•You need to file a paper return when this happens. When two people claim the same dependent, the e-file system automatically rejects the second claim. File your return by paper with all supporting documentation showing that your grandson lives with you (school records, medical records, etc.). The IRS will review both returns and likely send both parties a letter. Whoever has the strongest documentation showing they're eligible to claim the child will prevail. Since you have the child living with you, you have a stronger case than the non-custodial parent who provides no support. Just make sure to keep detailed records of expenses and support you provide.
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Amara Nnamani
One thing to consider - if your daughter is a full-time student, the rules are different! My daughter was going to school full-time and working part-time when my granddaughter was little. Because she was a student, she was still able to claim her child for EIC purposes, while I claimed the child for the Child Tax Credit using Form 8332. This weird split actually maximized the benefits for our whole family. Worth looking into if your daughter is taking any classes. The tax software I used didn't catch this - had to research it myself!
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Summer Green
This thread has been incredibly helpful! I'm dealing with a similar situation with my 5-year-old grandson. One thing I want to add that might help others - make sure to keep detailed records of ALL the expenses you pay for your grandchild throughout the year. I learned this the hard way when the IRS requested documentation. I now keep a simple spreadsheet with dates, amounts, and categories (food, clothing, medical, daycare, etc.) plus receipts. When I calculated everything for last year, I was shocked - we spent over $18,000 on our grandson while his mom contributed maybe $2,000. Having this documentation made it crystal clear that we provided more than half his support. Also, don't forget about medical expenses! If you're paying for doctor visits, prescriptions, dental work, etc., those all count toward the support test. These can add up quickly and really strengthen your case for claiming the dependent exemption.
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Melissa Lin
•This is such great advice about keeping detailed records! I'm just starting to navigate this situation with my grandson and hadn't thought about tracking medical expenses specifically. Quick question - do you include things like over-the-counter medications, vitamins, or supplies like diapers and formula in your medical expense category, or do those go under general support? Also, when you say you spent $18,000, does that include a portion of household expenses like utilities and groceries that benefit your grandson, or just direct expenses specifically for him? I want to make sure I'm documenting everything correctly from the start in case the IRS ever questions our claim. Your spreadsheet idea sounds like exactly what I need to implement right away!
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