Our legal ward, who is not related to us made over $4300. TT says she is not a dependent.

[romay1234]

We are the court ordered, legal guardians of a 17 year old who is not related to us. IRS says that she qualifies as a deduction even though she made over $4300.

https://www.irs.gov/publications/p501#en_US_2021_publink[phone number removed]

In determining if a child is a deduction, Turbo Tax does not give an option for this situation, only asking if we are related by blood. (Sister, grand child, child, etc.) Therefore TT says she is not a dependent. How do I make TT understand that legal guardianship (and fostercare for that matter) invalidates the $4300 earnings clause?

[ColeenD3]

It appears as though you are trying to claim dependency as a Qualifying Relative as opposed to as a Qualifying Child. A QC is not subject to the $4,300 income limit.

Qualifying Child

Five tests must be met for a child to be your qualifying child. The five tests are:

Go back over your answers to see what question changed her status.

1. Relationship,

2. Age,

3. Residency,

4. Support, and

5. Joint return

[romay1234]

Thanks for the answer and the suggestion that I double check my answers. I see when I enter Personal Information -> You & Your Family,  I have to choose between Son, Daughter, Adopted, A foster child, and None of the above.  I chose "None of the above" which sent me down this rabbit hole. While she is not officially a foster child, I see from the IRS that if the court appointed guardianship, she qualifies, the same as a foster child.

Turbo Tax should make this clear!! Perhaps it should say "A foster child/ Ward of the court." 

Once again, thanks for your quick response.

[Hal_Al]

It sounds like the child qualifies as a foster child ( court ordered legal guardians )  and that makes her a dependent under the qualifying child rules (no income test).  Do not choose none of the above.