Wyoming Kinship Caregiver Tax Benefits: CTC, EITC, and Head of Household

Why Tax Credits Matter for Kinship Caregivers

Wyoming has no state income tax, so there is no state-level credit to claim. But federal tax credits — the Child Tax Credit, Earned Income Tax Credit, and head of household filing status — can put substantial money back in a grandparent's or relative caregiver's pocket each year. These credits are separate from state benefits like POWER or SNAP, and claiming them does not affect your eligibility for those programs.

The catch: you generally need to claim the child as a dependent on your federal return to access these credits. The rules around who qualifies as a "qualifying child" versus a "qualifying relative" determine which credits are available and how much they are worth.

Child Tax Credit

For tax year 2026, the Child Tax Credit (CTC) provides up to $2,200 per qualifying child under age 17. The refundable Additional Child Tax Credit (ACTC) is limited to $1,700 per child and requires at least $2,500 in earned income.

To claim a grandchild or other relative's child for the CTC:

• The child must live with you for more than half the tax year
• The child must not provide more than half of their own support
• The child must be your qualifying child; this includes a grandchild, niece, or nephew who meets the relationship test, while a dependent who is only a qualifying relative may qualify for the separate Credit for Other Dependents
• The child needs a Social Security number valid for employment in the United States

Income phase-outs start at $200,000 for single filers and $400,000 for married filing jointly. Most kinship caregivers on fixed incomes fall well below these thresholds.

Earned Income Tax Credit

The EITC is designed for low-to-moderate-income workers. If you have earned income — wages, self-employment, or certain disability payments — and are raising a qualifying child, the credit can be worth several thousand dollars per year depending on your income and the number of qualifying children.

For a grandparent who works part-time or has returned to work to cover a grandchild's expenses, the EITC can be one of the largest single refunds available. The credit phases in as earnings rise, peaks at a plateau, and then gradually phases out at higher incomes.

Key requirements:

• You must have earned income (Social Security retirement alone does not count)
• The child must live with you for more than half the year
• You must meet the age and relationship tests
• Investment income must be below the annual threshold

If you are retired and living entirely on Social Security, the EITC will not apply. But if you have any earned income — even seasonal or part-time work — it is worth checking whether you qualify.

Head of Household Filing Status

Filing as head of household instead of single gives you a larger standard deduction and more favorable tax brackets. To qualify:

• You must be unmarried (or considered unmarried) on the last day of the tax year
• You must have paid more than half the cost of keeping up a home for the year
• A qualifying person (the child you are raising) must have lived with you for more than half the year

For a grandparent who is widowed, divorced, or separated and paying the household bills while raising a grandchild, head of household status can reduce your taxable income by several thousand dollars compared to filing as single.

How These Interact with Wyoming State Benefits

Claiming a child as a dependent on your federal return does not change your eligibility for the POWER Caretaker Relative cash grant. The POWER program looks at whether you are a non-needy relative caregiver providing daily care — your federal tax filing status is a separate matter.

However, for Medicaid and Kid Care CHIP, whether you claim the child as a tax dependent can affect whose income counts for eligibility. If the child is a non-filer and is not claimed by a parent, the child's Medicaid eligibility unit includes the child and any parents or siblings living with the child — excluding your income solely because you share a home. Consult with your DFS caseworker or a tax preparer to understand which approach benefits your household most.

Getting Help Filing

Wyoming VITA (Volunteer Income Tax Assistance) sites offer free tax preparation for low-income households. The IRS VITA locator at irs.gov can help you find the nearest site. AARP Tax-Aide also runs free preparation for older adults in many Wyoming communities.

The Wyoming Financial Help for Kinship Caregivers guide covers how each state benefit program interacts with your household's financial picture, including worksheets for separating what counts as the child's income versus yours.

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