New tax laws child credit

[joshramsey]

I claimed my step kids (not married) together for 8 years lived together for 5 years i was audited & not allowed to claim them

[xmasbaby0]

That is right.  If you were not the bio-parent you cannot get the child-related credits like child tax credit or earned income credit for children even if they lived with you and your girlfriend.  If a child who was not related to YOU lived with you the whole year you could get the $500 credit for other dependents for claiming them.  That's all.  

If you were not legally married to their mother they were not your step-children.  They were your girlfriend's children who lived with you.

10-27-2020  Edited to clarify----You said you and the children's mother were not married.  If you and your GF lived together and you were not the bio-parent you could not get child-related credits for claiming the children except for the $500 credit for other dependents.  If you and the children's mother were legally married that would make them your step-children and you would be able to claim them just the same as you could claim biological children.

[Opus 17]

[removed by poster]

[xmasbaby0]

@Opus 17 Please re-read the user's post.  He was not married to the children's mother.  He lived with them and is calling them "step-children."  

"I claimed my step kids (not married) together for 8 years lived together for 5 years i was audited & not allowed to claim them"

[xmasbaby0]

"I claimed my step kids (not married) together for 8 years lived together for 5 years i was audited & not allowed to claim them"

[Opus 17]

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[removed by poster] 

[Opus 17]

There are no recent changes to the tax law regarding the definition of a dependent.  All that changed is the amount of deduction or credit that a dependent qualifies for. 

@joshramsey if you were not married to the children's biological parent, then they are unrelated to you, and you can only claim them under very limited circumstances.  (For example, the children must live in your home all year, and the other parent must earn less than $12,000 and not be required to file a tax return.)  There may also be legal agreements between the biological parents (the exes), or you may have been unable to prove the children lived with you all year if the children lived part of the time with the other parent.  We can't help you understand your situation without a lot more details. 

[Hal_Al]

"I claimed my step kids (not married) together for 8 years lived together for 5 years i was audited & not allowed to claim them".  Why?

For the three years that you did not live with the kids, you were not allowed to claim them at all. You did not meet the relationship test  (you must be closely related or live with them ALL year).

For the other years you can claim them as dependents (if you met the full rules below), but you were not allowed to claim the child tax credit or the Earned income credit.  For years before 2018, this meant you were allowed the $4000 (+/-) (it went up each year)  dependent exemption (income deduction). For 2018 and beyond, you get the $500 other dependent credit. 

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The full rules are that a person can still be an other dependent (Qualifying relative in IRS parlance, even though they do not have to actually be related), if not a Qualifying Child*, if he meets the 6 tests for claiming a dependent:

1. Closely Related OR live with you ALL year
2. His/her gross taxable income for the year must be less than $4200 (2019)
3. You must have provided more than 1/2 his support
4. He must be a US citizen or resident of the US, Canada or Mexico
5. He must not file a joint return with his spouse or be claiming a dependent of his own
6. He must not be the qualifying child of another taxpayer

In addition to the above requirements, to claim your girlfriend children, they must meet all of the above requirements and:

--- your girlfriend must not be required to file a return,

--- she does not file a return claiming the children

*There are two types of dependents, "Qualifying Children"(QC) and standard ("Qualifying Relative" in IRS parlance even though they don't have to actually be related). There is no income limit for a QC but there is an age limit and student status test, a relationship test and a residence test. Only a QC qualifies a taxpayer for the Earned Income Credit and the Child Tax Credit. The Other dependent (qualifying relative) credit is worth (up to) $500 per dependent and is non-refundable.  That is, it can only be used to reduce an actual tax liability.