Tax Benefits of Foster Kids

Dependent Exemption

• Families which have a foster child in the family might be eligible for a tax exemption for a dependent. To qualify as a dependent, the foster child must be younger than the tax payer and under the age of 19 by the end of the tax year. The family must support the foster child for at least half of the year and the child should not provide over half of their own support from a job.
  
  

Child Tax Credit

• Foster children can allow a taxpayer to claim a child tax credit. The tax credit requires that the child lives in the home for at least half of the year, is under the age of 17 at the end of the calendar year and does not provide half of their own support.
  
  

Filing as Head of Household

• A family or individual with a foster child can file as a head of the household. To file as a head of the household, the child must live in the house for half of the year, must be younger than 19 at the end of the year and cannot pay more than half of their own support. The tax payer must also provide more than half of the total household income.
  
  

Child and Dependent Care

• Foster children allow the household to get credit for child and dependent care. To qualify, the child must be younger than 13 at the end of the year, must live with the tax payer for at least half of the year and must not pay more than half of their expenses.