Child Tax Credit Question - Claiming 3 Kids + 1 Month Old Grandchild With Custody

You're navigating a tax jungle here, and the IRS doesn't always make the path clear. The Child Tax Credit is like a buffet where the first three plates are full-sized and anything after that is appetizer-sized. For 2023 taxes, the full Child Tax Credit is $2,000 per qualifying child under 17, with up to $1,600 being refundable per child (that's the Additional Child Tax Credit part). The $500 credit you're referring to is the Credit for Other Dependents, which applies to dependents who don't qualify for the full CTC. Your 17-year-old actually wouldn't qualify for the full $2,000 CTC (they're too old), so they'd get the $500 Credit for Other Dependents anyway. The 1-month-old grandchild WOULD qualify for the full $2,000 Child Tax Credit if you have legal custody and they lived with you for more than half the year (which is obviously impossible for a 1-month-old, but the IRS has exceptions for children born during the tax year). So yes, absolutely claim that baby if you have legal custody! You'd get much more than $500.

I'm wondering if you have actual legal custody documentation for your grandchild? It's similar to how foster parents need placement documentation to claim foster children. Have you filed for legal guardianship or is this more of an informal arrangement? The distinction could impact your eligibility for the full Child Tax Credit versus just the $500 Credit for Other Dependents.

I was in a similar situation with my sister's child last year and got so frustrated trying to get answers from the IRS! After waiting on hold for 3+ hours multiple times, I finally used Claimyr (https://www.claimyr.com) and got through to an actual IRS representative in about 20 minutes. The agent confirmed that I qualified for the full Child Tax Credit since I had legal guardianship documentation. The Qualifying Child criteria and Qualifying Relative tests are really technical, and the IRS phone representative walked me through everything specific to my situation.

Hey, just wanted to add that for 2023 taxes (filing now in 2024), the Child Tax Credit is still $2,000 per qualifying child under 17, with up to $1,600 being refundable through the Additional Child Tax Credit. Your 14 and 15-year-olds definitely qualify for the full amount. Your 17-year-old only qualifies for the $500 Credit for Other Dependents. Your grandchild should qualify for the full $2,000 if you have legal custody - it doesn't matter that they're your fourth dependent.

I'm curious about how you might prove the support requirement for your grandchild. In most cases, you would potentially need to show that you provided more than 50% of the child's support for the year, which might be somewhat complicated to calculate for a newborn who's only been with you for a month. Do you perhaps have documentation from the child's parent(s) releasing their claim to the child as a dependent? This could be relevant if they're planning to file their own tax returns.

I went through almost this exact situation on April 12th last year. Here's what I learned: the $2,000 Child Tax Credit isn't limited to just three children - that's a common misconception. Each qualifying child under 17 can get you the full $2,000 credit (with up to $1,600 being refundable). Your 17-year-old aged out of the full CTC and only qualifies for the $500 Credit for Other Dependents. Your 1-month-old grandchild, assuming you have legal custody as of December 31, 2023, should qualify for the full $2,000 CTC. Make sure you have documentation showing when you obtained custody. When I filed on February 3rd this year, I included a note explaining my custody situation and had zero issues with my refund.