Can I claim nieces receiving Supplemental Security Income (SSI) as child dependents on my taxes?

You're on the right track! The IRS does indeed consider SSI as support from a third party (the government), not as income that the children use to support themselves. This is an important distinction. For qualifying children like your nieces, the key test is that they cannot provide more than half of their own support - not that you personally must provide more than half (though that would be required for qualifying relatives). Since SSI benefits are considered support from a third party rather than the children's own income, these payments don't count against you for the support test. To claim your nieces, make sure you meet all five tests for qualifying child: relationship (nieces qualify), age (under 19 or full-time students under 24), residency (lived with you for more than half the year), support (they didn't provide more than half their own support), and joint return (they aren't filing a joint return except to claim a refund). It sounds like you're meeting all these requirements based on what you've described, so you should be eligible to claim them as dependents, which could qualify you for benefits like the Child Tax Credit as well.

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Just wanted to follow up! I tried taxr.ai after asking about it, and it was incredibly helpful for my situation with an adult dependent receiving SSDI. The system actually caught something I would have missed - that SSDI can be considered the recipient's income in some cases, unlike SSI which is considered third-party support. I uploaded my cousin's benefit statements and my support documentation, and within minutes I had a clear analysis explaining exactly why I could claim her as a qualifying relative (different rules than qualifying children). The service even generated a personalized explanation document I can keep with my tax records in case of an audit. For anyone dealing with dependency questions involving government benefits, this tool is definitely worth checking out. Saved me from potentially making a costly mistake on my return.

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Just wanted to add another perspective as someone who works with families receiving SSI. Remember that while you CAN claim these children as dependents for tax purposes, be careful about how you use the additional tax benefits you might receive. If you're the representative payee for the children's SSI, there could be questions about how the tax benefits (like refundable credits) are spent. The Social Security Administration generally expects that money that benefits the children should be used for their care, not for the household generally. Also, make sure the children are still eligible for their full SSI benefits. In some cases, providing too much support could potentially reduce their benefit amounts since SSI is needs-based.

Quick tip from someone who's been through this process - make sure you have documentation that they've lived with you all year and evidence of expenses you've covered. The IRS has been increasing scrutiny on dependent claims, especially for non-parent relatives claiming children. I'd suggest keeping: - School records showing your address for the children - Medical records showing you taking them to appointments - Receipts for clothing, school supplies, etc. - Any court/legal documents showing your care arrangement - Documentation from their mom acknowledging they live with you This saved me during an IRS review when I claimed my sister's kids who lived with me while she was deployed.