Alaska Kinship Care Tax Credits for Grandparents and Relative Caregivers

Alaska has no state income tax, so there are no state-level tax credits for kinship caregivers. But federal tax credits can put hundreds or thousands of dollars back into your hands each year if you are raising a relative's child. Many grandparents and aunts do not realize they qualify — or they assume they cannot claim a child who is not their biological son or daughter.

Child Tax Credit

For tax year 2026, the federal Child Tax Credit provides up to $2,200 per qualifying child under age 17. A grandparent, aunt, uncle, or other relative raising a child can claim this credit if:

• The child lived with you for more than half the year
• The child did not provide more than half of their own support
• The child is your dependent for tax purposes
• The child has a Social Security number valid for employment; the taxpayer claiming the credit must also meet the Social Security number requirement (for joint filers, at least one spouse must have an SSN valid for employment)

You do not need a court order or formal guardianship to claim the credit. The child still must meet the qualifying-child tests; living with you and your financial support alone do not establish eligibility. The support test asks whether the child paid more than half of their own support.

If you and a biological parent both meet the qualifying-child tests, the parent can claim the child ahead of a nonparent. If no parent claims the child, a nonparent may claim only if their adjusted gross income is higher than that of every parent who could claim the child; if no parent qualifies, the person with the highest adjusted gross income wins. A relative's longer period of residence alone does not override a qualifying parent's claim.

For tax year 2026, up to $1,700 per qualifying child may be refundable through the Additional Child Tax Credit for eligible taxpayers. You may receive a refund even if you owe no federal income tax, but the refundable amount depends on earned income and other rules.

Earned Income Tax Credit (EITC)

The EITC is a refundable credit for low-to-moderate income workers. It can be worth several thousand dollars, especially for households with children. To claim it with a qualifying child:

• You must have earned income (wages, self-employment, or other work income — Social Security alone does not count)
• The child must live with you for more than half the year
• The child must meet the EITC relationship, age, and residency tests; unlike the Child Tax Credit, EITC has no child-support test
• Your income must fall below the EITC thresholds (which vary by filing status and number of children)

For many kinship caregivers, especially retired grandparents living solely on Social Security, the EITC may not apply because there is no earned income. But if you work part-time, have a small business, or earn any wages, the credit can be substantial — check with a tax preparer or use the IRS EITC Assistant to see if you qualify.

Dependent Care Credit

If you pay for childcare so you can work or look for work, the Child and Dependent Care Credit covers a percentage of those expenses — up to $3,000 for one child or $6,000 for two or more children. For tax year 2026, the credit rate ranges from 20% to 50% depending on your adjusted gross income.

The credit is nonrefundable: it can reduce federal income tax you owe, but cannot produce a refund beyond that tax liability.

This is separate from Alaska's Child Care Assistance Program (CCAP), which subsidizes childcare costs directly. You can use CCAP and still claim remaining out-of-pocket childcare expenses on your federal return.

Practical Tips for Kinship Tax Filing

• Get the child's Social Security number. You cannot claim the Child Tax Credit or EITC without it. If the child does not have one, apply through the Social Security Administration.
• Keep records of support. Save receipts for food, clothing, school supplies, medical costs, and housing expenses. If the IRS questions your dependent claim, documented support strengthens your case.
• Use free tax preparation. VITA (Volunteer Income Tax Assistance) sites operate across Alaska and provide free tax filing for low-income households. Many are trained on kinship caregiver situations.
• Do not skip filing. Even if you owe no taxes, filing a return is the only way to receive refundable credits like the Child Tax Credit.

Beyond Tax Credits

Tax credits arrive once a year. For the monthly financial programs available to Alaska kinship caregivers — ATAP child-only cash grants, SNAP food benefits, Denali KidCare health coverage, and more — see our Alaska Financial Help for Kinship Caregivers guide.

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