My MIL has temp guardianship of our daughter due to not being able to provide insurance. We all live in the same house, pay rent, and provide financially. Who claims her?

[danibeare123]

My husbands mother has temp guardianship of our daughter due to not being able to provide medical insurance. We all live in the same house, pay to live here, we both work, and provide financially for our child. My Husbands father has her on his insurance. (the only reason for the temp guardianship). Who claims her as a dependent?

[TaxGuyBill · Accepted solution]

For TAX purposes (I am going to assume that you will file a Joint tax return with your spouse, as well as your in-laws filing a Joint tax return with each other):

If your in-laws joint income is higher than your joint income, either one of you can claim her.  If their joint income is less than yours, only you can claim her.

For INSURANCE purposes, it may depend on the insurance.  In most cases, you can only add a person to the insurance if that person will be a dependent.  In the case of employer insurance, it would also affect the insurance being pre-tax or after-tax.  So from an insurance viewpoint, it may be problematic if you claim her.