Can I claim my wife's "niece" as a dependant? She's not blood relation, but was raised through the foster system by my wife's mother.

[reisender1673]

My wife's "niece" has been staying with us for more than half of 2015. I don't know if she can be claimed as a dependent... She is my wife's half brother's ex-girlfriend's daughter--no blood relation (she was born before my wife's half brother was with her). She and her siblings were taken away from her birth mom at a young age and raised through the foster system by my wife's mother. Does this make her count as a dependent who you can claim when they have lived with you more than half of the past year but less than the full year? She meets the other dependent criteria. Also, she is now an adult, so my wife's mother is no longer her guardian.

[Opus 17]

A foster child, if placed in a person's care by a legally constituted placement agency or authority under the laws of your state, is treated the same as a biological child for income tax.  However, it also matters how old the person is, their income, and other usual rules, and I'm not sure you have given us enough info to go on.

[bluedeb · Accepted solution]

She does not have to be a blood relative to be able to be claimed as a dependent, she has to live with you all year.  (for Head of Household the qualifying person has to be a blood relative).  She has to meet all the requirements for claiming a dependent.

Who can I claim as my dependent?

https://ttlc.intuit.com/replies/3288503

[reisender1673]

It's my understanding that if the person is not a blood relative that they have to have lived with you for the full year to be claimed as a dependent...

[bluedeb]

Yes, they have to live with you all year, as I stated above they don't have to be a blood relative to claim as a dependent, they have to meet all the requirements.  Go through the TurboTax software and it will let you know if she qualifies.

[Opus 17]

See IRS publication 501 page 19.  An adult must live with you all 365 days to be a dependent (plus meet other tests) unless they are a "relative who does not have to live with you."  That list includes "A son or daughter of your brother or sister" and son or daughter includes foster children, if they were placed in the home by a legal authority.

<a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-pdf/p501.pdf">https://www.irs.gov/pub/irs-pdf/p501.pdf</a>

Update: I think I agree with @bwa and this answer is not correct as it might apply to a former foster child.  I think it would still apply to a current foster child for however long that relationship exists under state law.

[reisender1673]

So because my wife's niece was placed under the care of my wife's mother and step-father by the state, my wife's niece would count under the "relative who does not have to live with you" section because she would be considered my wife's sister through the foster system?

[SteamTrain]

(deleted)

[bwa]

because she would be considered my wife's sister through the foster system?

You seem to be creating a "foster niece" category, which does not exist.

A foster child is different from other children categories.  A natural born child, adopted child or step child retains that category for ever, even if family changes occur.  Not so foster children.  A foster child is your foster child until they are someone else's foster child or they reach the age of emancipation.  For example, a foster child could be placed with family A in 2012, Family B in 2013, Family C in 2014 and emancipated out of the foster care system in 2015.  In 2015 they are not the foster child of family A, B and C, they are no ones foster child.  For that reason, I think you will have a difficult time supporting a "foster niece" category in claiming a dependent unless you can find a specific Tax Court case or IRS ruling confirming it.

[reisender1673]

Thank you. I think that answers my question.

[Opus 17]

Despite my earlier comment, I think I agree with this, except that I think it will depend on state law.  If the "foster child" relationship legally dissolves under the laws of your state, then the niece would not qualify as a "relative who does not have to live with you."  That foster child relationship might dissolve at age 18, or at some other age such as when the child graduates from college.  You should check with the foster agency in your state.