DC Kinship Caregiver Tax Credits

Tax Credits Most Kinship Caregivers Miss

Grandparents and relatives raising children in DC often focus on benefit programs — TANF, GCP/CRCP, SNAP, Medicaid — and overlook the federal and DC tax credits they may qualify for. These credits can put hundreds or thousands of dollars back into a household that is already stretched thin.

The key question for each credit is whether you can claim the child as a dependent. For a qualifying child, the child must meet the relationship, age, residency, support, and joint-return tests; the child must not have provided more than half of their own support. A separate support test applies to a qualifying relative.

Child Tax Credit (CTC)

For tax year 2026, the federal Child Tax Credit provides up to $2,200 per qualifying child under age 17. To claim it, the child must be your dependent, have a Social Security number valid for employment, and have lived with you for more than half the year. You also need a Social Security number valid for employment. A portion of the credit is refundable — meaning you can receive money back even if your tax liability is zero.

The relationship test includes a grandchild, niece or nephew, sibling, step-sibling, or eligible foster child. The child does not need to be your biological or adopted child.

Earned Income Tax Credit (EITC)

The federal EITC is a refundable credit for workers with low to moderate income. If you are working and claim a qualifying child, the credit can be substantial — up to several thousand dollars depending on your income level and the number of qualifying children.

A grandparent or relative caregiver who works even part-time may qualify. The child must live with you for more than half the year. The key trap: if you claim child-only TANF as a non-recipient caretaker (meaning you are not included in the TANF assistance unit), that does not affect your EITC eligibility. TANF received on behalf of the child is not counted as your earned income.

DC also has its own local EITC that supplements the federal credit.

Child and Dependent Care Credit

If you pay for childcare so that you can work or look for work, the Child and Dependent Care Credit offsets a portion of those costs. This can stack with the OSSE childcare subsidy — the credit applies to your out-of-pocket share of childcare expenses after any subsidy.

Head of Household Filing Status

If you are unmarried and paying more than half the cost of maintaining a home for a qualifying child, you may file as Head of Household. This filing status gives you a larger standard deduction and more favorable tax brackets than filing as Single.

Important Cautions

Only one taxpayer can generally claim a child as a qualifying child for the same tax benefits. If a parent and a nonparent both qualify, the parent has priority. If both parents qualify, the parent with whom the child lived longer has priority; if the child lived with each parent for the same amount of time, the parent with the higher AGI has priority. A parent who did not live with the child for more than half the year generally cannot claim the child as a qualifying child, but may qualify under the separate qualifying-relative rules if those tests are met.

GCP/CRCP and TANF payments are not taxable income. Government benefit payments received on behalf of the child are not included in your adjusted gross income and do not need to be reported as earnings.

Get help from a free tax preparer. VITA (Volunteer Income Tax Assistance) sites across DC offer free tax preparation for low- and moderate-income households. They understand dependent-claiming rules for non-parent caregivers and can ensure you receive every credit you qualify for.

For the complete guide to DC kinship financial programs — benefits, applications, recertification, and tax planning — see the DC Kinship Financial Help Guide.

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