Tax Credits
Many grandparents are not financially prepared for unexpectedly taking on a growing child as a dependent. When there are no other options, though, it’s impossible to not care for a child in need. Luckily, there are benefits offered by the federal government that can ease the strain. Information taken from Wikipedia:”Three tax credit opportunities are available for kinship families raising children in the United States. Earned Income Tax Credit provides a federal tax credit to workers with incomes up to 36,348 (single), or 38,348 (married) who are raising children. Families must meet income requirements that depend on the number of children they are raising. Caregivers do not have to be the child’s legal guardian or custodian, and the child doesn’t have to be defined as the caregiver’s dependent by the IRS. The child must be your biological child, grandchild, stepchild, foster or adoptive child, sibling, or a descendant of one of these. The child must have lived with you for more than half of the filing year and be under the age of 19, a full-time student under the age of 24, or totally disabled.Child and Dependent Care CreditChild and Dependent Care Credit helps families who pay for child care so that they can work or look for work. The dollar amount of the credit depends on the number of children in the family, the annual household income, and the amount of money paid annually for child care. Caregivers do not have to be the child’s legal guardian or custodian, but the child must be defined as the caregiver’s dependent by the IRS.Child Tax CreditChild Tax Credit offers a tax credit of up to 1000 per child. The maximum income allowable to receive this credit is fairly high, so many families who are over-income for other programs may be eligible. The qualifying child must be younger than 17. Caregivers do not have to be the child’s legal guardian or custodian, but the child must be defined as a dependent by the IRS.”
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