Utah Kinship Caregiver Tax Credits — CTC, EITC, and Head of Household

Tax Credits That Apply When You're Raising Someone Else's Child

Taking in a grandchild or relative's child reshapes your tax return in ways the IRS doesn't make obvious. If the child lived with you for more than half the year and meets the IRS qualifying-child tests, you may be eligible for federal tax credits. The tests differ by credit, and eligibility can put money back in your pocket — sometimes more than you owe in taxes.

Three credits matter most for Utah kinship caregivers: the Child Tax Credit, the Earned Income Tax Credit, and the filing-status bump you get from claiming head of household.

Child Tax Credit

The Child Tax Credit (CTC) is worth up to $2,200 per qualifying child under age 17 for tax year 2025. You don't have to be the biological parent. A relative who claims a qualifying child as a dependent may claim the credit if the child has a valid Social Security number and the other IRS requirements are met.

If your tax liability is less than the credit, a portion may be refundable through the Additional Child Tax Credit — up to $1,700 for tax year 2025, subject to the earned-income formula. That refundable portion matters for retired grandparents whose income tax bill is small.

The credit begins phasing out at $200,000 of modified adjusted gross income ($400,000 for married filing jointly), so most kinship caregivers on fixed incomes qualify for the full amount.

Earned Income Tax Credit

The EITC is the largest refundable credit available to working-age caregivers with modest earnings. If you have earned income — wages, self-employment, or even part-time work — and you're claiming a qualifying child, the credit can reach $4,328 for one child and $7,152 for two children (2025 amounts, adjusted annually for inflation).

Key rules for kinship caregivers:

• The child must have a valid Social Security number and live with you for more than half the year.
• You must have earned income. Social Security retirement benefits alone don't count as earned income.
• Investment income must be $11,950 or less.
• If you are married and filing separately, you generally cannot claim the EITC unless you meet the IRS separated-spouse rules.

Grandparents who work part-time while raising a grandchild often miss this credit because they assume it's only for parents. It isn't. The IRS applies relationship, age, residency, and joint-return tests to determine whether a child is your qualifying child; the child does not have to be your biological child.

Head of Household Filing Status

Claiming head of household instead of single lowers your tax bracket thresholds and gives you a larger standard deduction — $23,625 versus $15,750 for single filers (2025 amounts). You qualify if you're unmarried, paid more than half the cost of maintaining the home, and the qualifying child lived with you for more than half the year.

For a grandparent on Social Security who also has a small pension or part-time income, the head of household standard deduction alone can eliminate several hundred dollars of taxable income.

Utah State Tax Considerations

Utah's flat income tax rate for 2025 is 4.5%. Utah also offers a nonrefundable state EITC equal to 20% of the federal EITC, limited to Utah wages reported on a W-2. A nonrefundable Utah child tax credit of up to $1,000 is available for each qualifying child age five or younger at year-end, subject to an income phaseout.

Utah also offers a taxpayer tax credit, which phases out as income rises. Check the current TC-40 instructions or use VITA to determine which state credits apply to your return.

What You Need to Claim

To claim a grandchild or relative's child on your return, gather these documents before tax season:

• The child's Social Security card — the IRS rejects e-filed returns if the SSN doesn't match.
• Proof of residency — school records, medical records, or a letter from the child's school showing your address.
• Your own earned income records — W-2s, 1099s, or self-employment records if you're claiming the EITC.

If both you and the child's parent qualify and claim the same child, the IRS tiebreaker rules generally give priority to the parent. If no parent can claim the child, the person with the highest adjusted gross income generally wins; if a parent can claim but does not, a relative can claim the child only if their adjusted gross income is higher than the highest AGI of any parent who can claim.

Free Tax Filing Help in Utah

Utah has dozens of IRS Volunteer Income Tax Assistance (VITA) sites that prepare returns for free if your household income is under $67,000. VITA preparers are specifically trained on credits like the EITC and CTC. The AARP Foundation Tax-Aide program serves taxpayers over 50 at no cost regardless of income. Call 211 or visit irs.gov/vita to find a site near you.

If you're already receiving the Utah Specified Relative Grant or other DWS benefits for the child, those benefits are not taxable income and won't affect your tax credits.

For a complete walkthrough of every Utah benefit available to kinship caregivers — cash grants, Medicaid, SNAP, and more — the Utah Kinship Financial Help guide maps each program to your situation.

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