CTC AND GUARDSHIP

[artp]

Taxpayer was appointed guardship for 2 children (unrelated) under age 17 for several years.  Parents are both incarcerated and no other relatives qualify to claim the children. Children live with taxpayer all year and are fully supported by taxpayer. Can taxpayer claim CTC?

[Lee B]

When was the appt and how long did they live with your clients during 2024?

[artp]

Lee B

She was appointed guardianship several years ago and the children lived with her since 2022.

Art

[Lee B]

Yes, I am claiming a foster child who lived with my client for 7 months during 2024.

Hopefully his drug addict mother, doesn't claim him first

[jklcpa]

IRC sec 24 covers the CTC, and the other definitions at sec 24(f) has the definition of "child", specifically concerning foster children at 24(f)(1)(C) -

Quote

(f) Other definitions and rules For purposes of this section—

(1) Child defined

(A) In general the term “child” means an individual who is—

• (i) a son, daughter, stepson, or stepdaughter of the taxpayer, or
• (ii) an eligible foster child of the taxpayer.

(B) Adopted child

In determining whether any of the relationships specified in subparagraph (A)(i) or paragraph (4) exists, a legally adopted individual of the taxpayer, or an individual who is lawfully placed with the taxpayer for legal adoption by the taxpayer, shall be treated as a child of such individual by blood.

(C) Eligible foster child

For purposes of subparagraph (A)(ii), the term “eligible foster child” means an individual who is placed with the taxpayer by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction.

 

[artp]

Judy

Technically, my client is a "Guardian" appointed by the court rather than a foster parent. She has the same role, legal status, goal, decision making and financial support as parent. When looking at the relationship list Foster child is listed, but I don't see guardianship children, so that was the reason for my question. Guardianship seems to have more legal status than Foster parents, yet are not specifically listed.

 

Art

[jklcpa]

10 minutes ago, artp said:

Judy

Technically, my client is a "Guardian" appointed by the court rather than a foster parent. She has the same role, legal status, goal, decision making and financial support as parent. When looking at the relationship list Foster child is listed, but I don't see guardianship children, so that was the reason for my question. Guardianship seems to have more legal status than Foster parents, yet are not specifically listed.

 

Art

Those children under a guardianship are considered foster children for this purpose.

See this IRS page under "What Are the Eligibility Factors" where it starts by saying "Parents and Guardians" https://www.irs.gov/newsroom/grandparents-and-other-relatives-with-eligible-dependents-can-qualify-for-2021-child-tax-credit

And this congressional page: https://crsreports.congress.gov/product/pdf/IN/IN11853  Look on page 2 under "Relationship page where it says this: 

Quote

Relationship Test
Most types of relatives of a child meet the relationship test: parents, grandparents, aunts/uncles, and siblings all meet this test. Legal guardianship—where the child is placed with an adult by a court order—would meet this test (the child would be considered a “foster child” under this test), regardless of the actual biological relationship between the child and taxpayer.
Because of the relationship test, kinship care by some of the child’s relatives (i.e., grandparents/great grandparents, aunts/uncles, siblings) would meet the relationship requirement. However, other types of kinship care—like informal caretaking of a child by a close family friend (i.e., no legal guardianship)—would not.

 

[artp]

Judy,

 

Thanks for the reference. That really helps!

Art