It depends. Chances are good that she can claim the child on her taxes. The grandmother may claim her grandchild if:
- The grandchild lived with her at least 6 months and one day last year.
- The child's mom will not or cannot claim her child
- The child did not provide at least half of it's own support. (Obviously did not if on Medicaid)
This is a tax forum, so I can't give any information on how state Medicaid is affected. That might be information you would want to investigate with the state before filing the tax return.
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