Informal Kinship Care Taxes — Claiming a Grandchild Without Court Papers

A grandchild lands in your home because a parent can't cope — addiction, incarceration, a mental health crisis — and there is no court order, no guardianship paperwork, no child welfare case. You are raising the child on a handshake and a family obligation. Does the IRS care that you don't have official custody?

No. Federal tax law and state family law operate on completely separate tracks.

The IRS Does Not Require Custody Papers

Under IRC § 152(c), a grandchild qualifies as your dependent if the child meets five tests: relationship, age, residency, support, and joint return. None of those tests mention a court order, a guardianship decree, or a child welfare placement. The IRS looks at where the child actually slept and who the child is related to, not at what a judge signed.

A grandparent raising a grandchild under an informal family arrangement — sometimes called "informal kinship care" or "private kinship care" — can claim that grandchild as a qualifying child if:

• The child is your biological grandchild, step-grandchild, or other qualifying descendant (relationship test).
• The child is under 19 at year-end, or under 24 and a full-time student during at least five calendar months of the year, or permanently and totally disabled (age test).
• The child lived with you for more than half the year — at least 183 nights (residency test).
• The child did not provide more than half of their own financial support (support test).
• The child did not file a joint return with a spouse, except solely to claim a refund (joint return test).

That's it. Legal guardianship, custody, a power of attorney, a caregiver affidavit — these documents serve other purposes (school enrollment, medical consent, state benefits), but they are neither required nor sufficient for federal tax dependency.

Why Documentation Still Matters

The IRS doesn't ask for custody papers, but it may ask you to prove the child lived with you. If your return is selected for review — especially in an e-file rejection where a parent also claims the child — the IRS may send CP75 or Letter 3572 requesting evidence of residency.

Acceptable proof includes:

• School records showing your address as the child's home address.
• Medical or dental records listing you as the responsible party at your address.
• Childcare provider statements confirming drop-off and pick-up at your home.
• A letter from a landlord, social worker, or clergy member confirming the child resides with you.
• Government correspondence (Medicaid, WIC, SNAP) mailed to the child at your address.

An overnight residency log — a simple calendar where you note each night the child sleeps at your home — helps organize the night count. School enrollment and medical or dental records are stronger supporting documents. The IRS counts nights, not days, so 183 or more nights in your home satisfies the residency test even if the child spends weekdays or occasional weekends with a parent.

Informal vs. Formal Kinship: Tax Differences

Formal kinship care involves a state child welfare agency placing the child with you, sometimes with Title IV-E guardianship assistance payments. Informal kinship care is a family decision with no agency involvement.

For federal tax purposes, the distinction barely matters. Both formal and informal kinship caregivers use the same five qualifying-child tests. The one difference: if you receive kinship stipend or TANF payments through a formal placement, those payments may affect whether the child provided their own support (TANF paid to you on behalf of the child is generally not the child's own support, so it doesn't hurt the self-support test).

When a Parent Objects

In informal arrangements, the child's parent sometimes files a return claiming the same child. If you both e-file, the second return is rejected. The IRS then asks both parties to prove residency.

Under the tiebreaker rules, if a child is a qualifying child of both a parent and grandparent, the parent has priority if they claim the child. If no parent claims the child, a grandparent can claim only if their AGI is higher than that of every parent eligible to claim the child. If the child spent 200 nights at your home and 165 with the parent, you meet the residency test and the parent does not — regardless of whether you have a court order saying so.

Requesting an IP PIN for the grandchild prevents anyone else from e-filing a return claiming the child without the PIN.

The Bottom Line

Informal kinship care is not a tax barrier. The IRS tests physical residency, family relationship, and financial support — not legal custody status. Keep records that prove where the child sleeps, and you are in the same position as a grandparent with a stack of court documents.

Our Kinship Tax Guide walks through every qualifying test with examples specific to informal placements, including the residency log template and the support calculation worksheet.

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