Tax Credits for Grandparents Raising Grandchildren in Kansas

Raising a grandchild on a fixed income means every dollar matters — including the ones you can get back at tax time. Several federal tax credits are available to grandparents and relative caregivers, and claiming them doesn't require legal custody or guardianship. But there's an important interaction with Kansas benefit programs that most caregivers don't realize until April.

Can You Claim a Grandchild as a Dependent?

To claim the Child Tax Credit or EITC based on a child, the child generally must meet the qualifying-child rules. Common tests include:

• Relationship: your grandchild, niece, nephew, sibling, or their descendant. A foster child placed with you by an authorized agency or court may also qualify.
• Age: under 19 at year-end (or under 24 if a full-time student)
• Residency: the child lived with you for more than half the year
• Support: the child did not provide more than half their own support
• No joint return: the child did not file a joint tax return

Most kinship caregivers meet these tests without any court order. If the grandchild lived with you for more than half the year and did not provide more than half of their own support, you may be able to claim them if they meet the other qualifying-child tests.

Child Tax Credit

For tax year 2026, the Child Tax Credit provides up to $2,200 per qualifying child under age 17. Up to $1,700 may be refundable through the Additional Child Tax Credit (ACTC); eligibility for the refundable amount generally depends on earned income.

For caregivers with earned income, the refundable portion may be valuable. Social Security and pension income alone do not count as earned income for the ACTC.

Earned Income Tax Credit (EITC)

The EITC is a refundable credit for low-to-moderate-income workers. If you have earned income (wages, self-employment) and are claiming a qualifying child, the credit can be substantial — up to several thousand dollars depending on your income level and number of qualifying children.

The catch: Social Security and pension income alone don't count as "earned income." You need wages or self-employment income to qualify for the EITC. If you're fully retired with no earned income, the EITC does not apply, and the refundable ACTC generally is not available; the nonrefundable CTC may reduce tax owed if you have a federal income tax liability.

The KanCare and TAF Interaction

Here's the part that matters for Kansas kinship families: whether you claim the grandchild as a tax dependent affects their KanCare eligibility determination.

KanCare uses MAGI (Modified Adjusted Gross Income) rules. If you claim the child as your tax dependent, your income gets included in the child's MAGI household — which could potentially affect their Medicaid or CHIP eligibility.

If you don't claim them, your income is excluded from their health coverage calculation.

The child's eligibility depends on the MAGI household and age category. If claiming the child brings your income into that household, it could affect eligibility near the applicable Medicaid or CHIP income limit.

TAF child-only cash is unaffected. Your income is excluded from TAF regardless of tax dependency status.

Kansas State Tax Considerations

Kansas follows federal tax law for dependents and credits. If you claim the grandchild as a federal dependent, they carry through to your Kansas income tax return as well, reducing your state tax liability.

Kansas does not have a separate state-level kinship caregiver tax credit. The benefits come through the federal credits that flow to your state return.

The Practical Decision

Whether claiming the grandchild as a tax dependent makes financial sense depends on the tax result and the effect on KanCare eligibility. Compare both outcomes before filing; TAF child-only eligibility is unaffected by tax dependency status.

A tax professional or VITA (Volunteer Income Tax Assistance) site — available free at libraries and community centers across Kansas — can run both scenarios and tell you which filing approach gives the best combined outcome.

The Kansas Kinship Financial Help Guide covers how tax credits interact with TAF, SNAP, and KanCare, so you can make the filing decision with the full picture of how each program counts income.

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