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Tax Deductions for Grandparents

Quick tips if you are raising your grandchildren

En español | 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).

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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