2023 Foster children question

[cwhite31023]

So who would claim the kids?

Foster parent(me and my spouse) had the kids from Jan 1, 2023 until June 12, 2023. They remained in care under their father from June 12, 2023 until Sept 29, 2023. Then placed back into another foster family. 

Technically no one had them for over 6 months, so who gets to claim the kids?

[xmasbaby0]

What a tough year for those children.   It sounds like no one had them for half the year, so no one can claim them as dependents.   

[TomK2023]

Please see Champ Hal-Al's answer below:

Q. Can anyone claim her as a dependent?

A. Simple answer: no.  As you already realized, to be a "qualifying child" dependent (and qualify for the child tax credit and Earned Income Credit) the child must have lived with a close relative (including a foster parent) for more than half the year.

That said, it's possible that the child could be a "Qualifying Relative" dependent if a close relative (including a foster parent), provided more than half the child's support for the year.  But a Qualifying Relative only gets you the $500 (on refundable) other dependent credit; not child tax credit or earned income credit.

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, student status, a relationship test and residence test. Only a QC qualifies a taxpayer for the Earned Income Credit and the Child Tax Credit. 

They are interrelated but the rules are different for each.

The support test is different for each type. The support test, for a QC, is only that the child didn't provide more than half his own support. The support test for a Qualifying Relative is that the taxpayer provided more than half the relative's support.

Rules for Claiming a Dependent on Your Tax Return

[Opus 17]

The children could be qualifying relative or “other” dependents, if one of the families where they lived paid more than half their total financial support for the whole year, or if every family that paid more than 10% of their support signs a multiple support agreement designating one of the families as being allowed to claim them.

However, this type of dependent does not qualify for the $2000 child, tax credit, or the dependent, CareCredit, or ahead of household status. It would be a $500 credit for child only.

[cwhite31023]

Defintely a rough year, We had custody from 2021-2023, we attempted to get them back in September but we had other foster kids living with us at that time. Three of the 4 our actually related to us. I've asked their bio dad to see what he would like to do.

[cwhite31023]

Thank you, that makes a lot of sense. I guess I didn't look at it that way. 3 of the 4 kids are actually related to us, and we tried to get them back since we had them all of 2021 and the majority of 2022, he claimed 2 in 2022 and we claimed one in 2022. 

Thank you again for your help