Can a Grandparent Claim Grandchildren on Income Taxes?

by Michael Keenan
You might be able to claim your grandchildren as dependents.

When people think of dependents, they usually think of their own kids. However, if your grandchildren live with you, you might be able to claim them. Since every dependent you claim on your income taxes lowers your tax bill, you might be missing out on some tax savings if you don't.

Qualifying Child

To be your qualifying child, your grandchild must usually be under 19 years old. However, if she's a full-time student, the age limit increases to 24. If she's permanently disabled, there's no age limit. In addition, the child must live with you for at least half the year and can't have provided more than half her own support. Support includes all of the grandchild's expenses for the year, such as housing, clothes, medical care, transportation and entertainment.

Qualifying Relative

If your grandchild doesn't meet the qualifying child test, you might still be able to claim him as a qualifying relative. Grandchild are one of the types of relatives whom the IRS doesn't require to live with you to meet the qualifying relative test. However, you must provide more than half your grandchild's support and your grandchild's gross income can't exceed $3,900 as of the 2013 tax year. Finally, you can't claim your grandchild under the qualifying relative criteria if he meets the qualifying child criteria for someone else.

Tiebreakers

If multiple people qualify to claim a child as a dependent, the IRS has tiebreakers to determine who is entitled to the exemption. First, if the other person eligible to claim your grandchild is the child's parent, the parent wins. Second, if you and another person besides the child's parent are both eligible to claim the grandchild, the person with the higher adjusted gross income is entitled to the deduction. For example, if your grandchild qualifies as a qualifying child for both you and another grandparent, you get to claim her if your AGI is higher than the other grandparent's AGI.

Warning

If both you and your grandchild's parent are eligible to claim the child because you both meet the qualifying child criteria, the parent has the right to claim the child. However, the parent can allow you to claim the child, but only if you have a higher AGI. For example, say your son and grandson live with you, your son's AGI is $25,000 and yours is $35,000. Your son is entitled to claim the exemption because he is your grandson's parent. But, he could let you claim him instead because your AGI is higher. If your AGI was only $20,000 -- lower than your son's AGI of $25,000 -- you couldn't claim your grandchild even if your son didn't claim him and said that you could.

About the Author

Mark Kennan is a writer based in the Kansas City area, specializing in personal finance and business topics. He has been writing since 2009 and has been published by "Quicken," "TurboTax," and "The Motley Fool."

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