Ohio Kinship Care Tax Credits: What Grandparents Raising Grandchildren Can Claim

Two Federal Credits and a Dependent-Status Issue

When you're raising a grandchild, tax season is an opportunity most kinship families overlook. Two federal credits may put real money back in your pocket — sometimes thousands of dollars — if you qualify. Dependent status can affect whether you're eligible.

Child Tax Credit. If the child meets the current qualifying-child rules and is claimed as your dependent, you may qualify for the Child Tax Credit. The child generally must be under 17 at the end of the tax year. Earned income is not required for the nonrefundable Child Tax Credit; it is required for the refundable Additional Child Tax Credit. The exact amount and eligibility limits depend on the tax year and your income.

Earned Income Tax Credit (EITC). If you're working and your income falls within the EITC range, a grandchild who meets the qualifying-child rules may increase this credit. The EITC is refundable, meaning you may receive the credit even if you don't owe taxes.

Dependent status. Claiming the child as a dependent can affect which tax credits you may claim. For tax year 2025, there is no separate personal exemption deduction for a dependent; check current IRS rules for later tax years.

The Tax Dependency Trade-Off

Here's where it gets complicated for kinship families. Claiming the grandchild as a tax dependent has benefits (credits and deductions) but also consequences for other programs.

If you claim the child as a tax dependent, the child becomes part of your MAGI household for Medicaid purposes. That means your income is now factored into the child's Medicaid eligibility. If your income is modest, that's fine. If it pushes the household above 156% FPL (or 206% FPL for CHIP), it could affect the child's health coverage.

If you don't claim the child, the child is treated as a one-person household for Medicaid purposes, and only the child's own income (if any) is counted. A child with no income meets the income test, though other eligibility requirements still apply.

The best choice depends on the child's Medicaid household calculation and your tax eligibility. Compare the coverage effect and potential tax credits before filing, or ask a VITA (Volunteer Income Tax Assistance) preparer and a county Medicaid caseworker.

Who Counts as a Qualifying Child

To claim a grandchild (or other relative's child) as a dependent, the IRS requires:

• The child lives with you for more than half the year
• The child is under 19 (or under 24 if a full-time student)
• The child doesn't provide more than half of their own financial support
• If another person also meets the tests, IRS tie-breaker rules determine who may claim the child

A court order isn't required. Informal care may qualify if the child meets the IRS qualifying-child tests.

If the Biological Parent Also Claims the Child

This is a common tax complication for kinship families. If more than one person claims a child, the IRS applies tie-breaker rules after checking who meets the qualifying-child tests. A parent generally has priority when the child qualifies as the qualifying child of both the parent and a nonparent. If the child lived with you for 8 months and the parent for 4, you meet the more-than-half-year residence test, but check all the other requirements before claiming.

Keep documentation: school enrollment records, medical records, utility bills — anything that shows the child's address during the year.

Free Tax Preparation

Don't pay for tax preparation when free help is available. VITA sites across Ohio offer free tax filing for low-and-moderate-income families, and preparers are trained on credits like the EITC and Child Tax Credit. Find a site through the IRS VITA locator or call 211.

For the complete financial picture — including how tax credits interact with OWF, SNAP, and Medicaid — the Ohio kinship financial help guide covers every program and shows how the pieces fit together.

See more Ohio guides →