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Tax Deductions for Grandparents

Quick tips if you are raising your grandchildren


Alicia and Trino Jiménez are part of a growing number of Hispanic grandparents stepping in for parents facing hardships. Of some 2.5 million U.S. households in which grandparents care for grandchildren under 18, more than 450,000 —1 8 percent — are Latino.

Alicia Jiménez took in her four grandchildren when their parents' struggles reached a crisis point. To provide support, she learned about tax deductions (which reduce taxable income) and credits (which lower your tax bill dollar for dollar).

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In their 2010 return, grandparents who claim grandchildren as dependents (see "qualifying child" below) can take a tax deduction of $3,650 per child. Tax credits include $1,000 for each grandchild under the Child Tax Credit and up to $3,000 for one child and $6,000 for two or more to pay for child care expenses (for children 12 and under) that enable grandparents to work or look for work.

Qualifying child
A "qualifying child" can be a son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, or a descendant of any of them, such as a grandchild. Your adjusted gross income must be greater than that of the children's parents. The children must have lived with you for more than half of 2010 and be:

  • under the age of 17;
  • dependent on you for half of their support for 2009; and
  • a U.S. citizen, U.S. national, or U.S. resident alien.

 

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