Maine Kinship Care Tax Credits: Child Tax Credit and EITC for Grandparent Caregivers

If you are a grandparent or relative raising a child in Maine, you may be leaving hundreds or thousands of dollars on the table at tax time. The Child Tax Credit and the Earned Income Tax Credit are both available to kinship caregivers — but only if you claim the child correctly on your return.

Claiming the Child as a Tax Dependent

For the Child Tax Credit, the child generally must be your dependent and meet the IRS qualifying-child rules. A grandchild may qualify if the relationship, age, residency, support, and other requirements are met:

• The child lives with you for more than half the year
• The child does not provide more than half their own support
• Only one taxpayer claims the child — if both a parent and a relative meet the qualifying-child tests, the IRS generally treats the child as the parent's qualifying child; other tiebreaker rules apply when no parent can claim

You do not need a court order or legal guardianship to claim a grandchild as a dependent. You must meet the applicable IRS tests; relationship, residency, and support are among them.

One important note for TANF: if you claim the child as a tax dependent and also receive a child-only TANF grant, Maine counts half of the child's need standard as unearned income when calculating the grant. This is a state TANF rule — it does not affect your federal tax credits, but it does slightly reduce the child-only cash payment.

The Child Tax Credit

For tax year 2025, the federal Child Tax Credit provides up to $2,200 per qualifying child under age 17. A portion of the credit, up to $1,700, is refundable — meaning you can receive it as a refund even if you owe no federal income tax.

To claim the CTC, the child must:

• Be under 17 at the end of the tax year
• Have a valid Social Security number
• Be your dependent
• Live with you for more than half the year

For grandparents on fixed incomes, the refundable portion is particularly valuable because it puts cash in your pocket regardless of your tax liability.

The Earned Income Tax Credit (EITC)

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

Key rules for kinship caregivers:

• You must have earned income — Social Security retirement benefits are not earned income. If you work, EITC eligibility depends on your earned income, adjusted gross income, filing status, and other rules
• The child must live with you for more than half the year and be under 19, under 24 if a full-time student, or any age if permanently and totally disabled
• Investment income must be $11,950 or less for tax year 2025

If you are retired and have no earned income, you cannot claim the EITC. But if you work at all — even seasonally or part-time — it is worth running the numbers.

Free Tax Preparation Help

Many kinship caregivers qualify for free tax preparation through:

• VITA (Volunteer Income Tax Assistance) sites across Maine, which offer free basic tax preparation to qualified taxpayers. The IRS does not set a program-wide income limit; many sites serve people who generally make about $70,244 or less, and individual sites may set their own limits
• AARP Tax-Aide at community centers and libraries, available to taxpayers of all ages (despite the name)
• IRS Free File at irs.gov for online preparation if your income is under the threshold

These services are especially helpful for first-time dependent claims. Explaining your kinship situation to a trained preparer ensures the return is filed correctly and you claim every credit available.

What This Means Alongside Maine Benefits

Refunds from the federal EITC and Child Tax Credit are not counted as income for federal or federally funded benefits, including TANF, SNAP, and Medicaid. For at least 12 months, the refund is also excluded as a resource. If a refund remains after 12 months, check the asset rules for each program.

The Complete Benefits Map

Tax credits are one layer of the financial support available to kinship caregivers in Maine. The Maine Kinship Financial Help guide covers every benefit — from TANF and MaineCare through tax season — with an arrangement-to-benefit matrix that shows exactly which programs you qualify for based on your legal relationship with the child.

See more Maine guides →