Can I claim my niece that I have had for 3 months as a ward of the state since I paid her daycare while she is still with me...

[Opus 17]

She can't be your qualifying child dependent if she only lived with you 3 months.  She could be your qualifying relative dependent if you meet some difficult tests, but a qualifying relative dependent is only worth a $500 "other dependent" credit and does not allow you to claim the day care credit.

To be your qualifying relative dependent, there are 2 tests.

1. No one else can claim her as a qualifying child dependent.  Usually, a parent can claim the child if the child lived in the same home as the parent for more than half the nights of the year, even if the parent could not provide financial support.

2. You provided more than half the child's total financial support for the year, OR, no one provided more than half her support, and you get a signed agreement from everyone else who provided at least some financial support for the child that you can claim her and they will not.