Keeping You Informed

Claiming a Dependent Exemption for a Child in Foster Care

According to the Internal Revenue age 24 if a student or any age if $4050.00 per exemption. Service Publication 501, Exemptions, permanently disabled) Note: Anyone who is not a U.S. Standard Deduction and Filing 3. Residency (the child must have citizen, resident alien, national or Information, foster parents may be lived with you for more than half of resident of Canada or Mexico cannot eligible to claim a Dependent the year - at least 183 days) be considered a dependent. Exemption for each child in foster care Note: The time period must be they care for during the tax year who is during the specific tax year Can I claim a dependent eligible to be considered a Qualifying between January 1 and exemption for a child I have Child. Certain tests apply. December 31. cared for even though the 4. Support (the child cannot have Division of Child Protection This Keeping You Informed (KYI) provided more than half of his or bulletin provides some basic her own support for the year) and Permanency (DCP&P) information concerning the IRS Note: The foster care board rate provided a board and clothing regulations. For full and detailed you receive is considered support allowance payment? information, you should review IRS from the state - not from the child. Publication 501 available at: http:// 5. Joint Return (the child cannot Yes, you may still be able to claim the www.irs.gov/pub/irs-pdf/p501.pdf. file a joint return) exemption. The IRS does not consider the board or clothing allowance What is a Qualifying Child? If all five of these tests are met, the payment as income received by you or child is considered to be a qualifying the child. The board and clothing child. A qualifying child is a child living in allowance payment are considered to be a reimbursement and support your home who meets the 5 Internal What is a Dependent Revenue Service (IRS) tests/rules to provided by the state and does not be considered a qualifying child. The Exemption? affect eligibility. tests are: A dependent exemption is a specified How do I know if I can take a 1. Relationship (the child must amount used to reduce your adjusted dependent exemption for the have been placed in your home by gross income. You may be able to child I’ve cared for? the state or an approved agency claim a dependent exemption for each for you to foster) qualifying child you claim as a As long as the child meets the 2. Age (the child must be under dependent. qualifying child tests and they are a Basic Information for Foster, Adoptive and Kinship Families Foster, BasicInformationfor Adoptive age 19 by the end of the tax year, For the 2017 tax year, that amount is U.S. citizen, they are eligible to be claimed by you as a dependent. “The board If the tests are met, is there and clothing anything else I need in order to allowance claim the exemption? payment are Yes, you must have a valid considered to Social Security number for the child. be a reimbursement Special Note: Be aware that there is a possibility that the child’s birth and support parents may also file a tax return provided by claiming the child for a dependent exemption. If this should happen the the state and exemption may be disallowed, and you does not affect will be notified by the IRS. eligibility.”

Foster and Adoptive Family Services Revised January 2018 If I receive a notice telling me Additional questions? that the exemption has been disallowed, what should I do? If you have specific questions regarding the Dependent Exemption and/or preparation of your income tax The notice you receive will provide the return, please contact the IRS at reason why the exemption was https://www.irs.gov/ or 800.829.1040. disallowed and contact information to You can also discuss the matter with a reach the IRS if you have questions tax preparation expert. concerning the notice.

FAFS does not employ tax experts and Suggestion: Prior to contacting the only provides general information. IRS, you can obtain information that FAFS intends this information to be will support your claim. The information used for the purpose of awareness and would be a verification from DCP&P does not suggest it be solely relied indicating that the child was placed upon for income tax preparation with you and remained in your home decisions. and care for over 6 months during the specific tax year.

If you have any questions about Claiming a Dependent Exemption for a Child in Foster Care, please contact FAFS’ Information Line at 800.222.0047, or visit us online at www.fafsonline.org. All of our services are free and confidential. www.facebook.com/fafs.nj

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