Raising Grandchildren May Impact  

                          Your Federal Taxes 

GRANDFAMILIES — Are you receiving all the tax benefits you deserve?

Selecting the correct filing status and tax credits will give you the lowest tax. 
Some credits are refundable and may create a refund even if you paid little or no 
federal income taxes. You may be eligible for some of these tax benefits if you are 
responsible for raising a grandchild or other qualifying child.

Brief summaries of these benefits are shown below:

Head of Household Filing Status – If you are considered unmarried and have a 
qualifying child, you may be eligible to use Head of Household as your filing status. This 
is generally more favorable than a Single filing status.   

Exemption for the Child – If you are a grandparent or other relative who has a child 
living with you, specific rules may allow you to claim that child as a dependent. If you can 
claim a dependent, you may be eligible for other federal tax credits.  

Earned Income Credit (EIC) – If you are working and have a qualifying child living with 
you, the EIC may be available to you even if you are 65 years of age or older.   If you 
qualify, the EIC creates a refund even if you paid little or no federal income taxes.   

Child Tax Credit (CTC) – If you are raising a grandchild or other qualifying child under 
age 17, you may be able to take the CTC and, under specific circumstances, the 
Additional CTC.  The Additional CTC may give you a refund even if you do not owe any 
federal income taxes.

Credit for Child & Dependent Care Expenses – This credit may be available if you pay 
someone to care for a dependent under age 13 or for your spouse or a dependent who 
is physically or mentally not able to care for themselves while you work or look for work. 
This is a credit up to 35% of your unreimbursed, out-of-pocket expenses.  

Qualified Education Expense – There are several federal tax credits or deductions 
available if you save for or pay education costs for yourself, your spouse, or a student 
that you claim as a dependent on your federal tax return. Education benefits include,  
but are not limited to the Education Credits (American Opportunity, and Lifetime  
Learning Credits), Student Loan Interest Deduction, and Coverdell 
Education Savings Account.

Medical and Dental Expenses – If you itemize deductions, you may be 
able to include medical and dental expenses you pay for yourself, your 
spouse, or your dependent.

                     Internal Revenue Service

Publication 4694 (Rev. 12-2011)  Catalog Number 20263D  Department of the Treasury  Internal Revenue Service  www.irs.gov

For your awareness…

Foster Care Payments – Generally, payments you receive from the state or other 
eligible entity for providing care in your home to a foster child, perhaps your grandchild, 
are considered support for that child. These payments are not included in your income for 
federal tax purposes. However, if you receive payments to maintain space in your home 
for emergency foster care, you must include these payments as income for federal tax 
purposes.

Foster Grandparent Program – This program is one of several National Service Corps 
programs. Income for supportive services or reimbursement for out-of-pocket expenses 
should not be included in your income for federal tax purposes.

                   Additional Information and Resources

For additional information on each of these federal tax topics visit our website at www.irs.
gov, or call toll-free at 1-800-829-1040. 

For a free paper copy of any the following publications and forms, please call 1-800-829-
3676 (1-800-TAXFORM).
•    Publication 501, Exemptions, Standard Deduction, and Filing Information
•      Publication 502, Medical and Dental Expenses (including the Health Coverage Tax 
Credit)
•    Publication 503, Child and Dependent Care Expenses
•    Publication 596, Earned Income Credit (EIC)
•    Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans
•    Publication 970, Tax Benefits for  Education
•    Publication 972, Child Tax Credit
•    Form W-10,  Dependent Care Provider’s Identification and Certification
•    Form 2120, Multiple Support Declaration
•    Form 2441, Child and Dependent Care Expenses
•    Form 8812,  Additional  Child Tax Credit
•    Form 8862,  Information To Claim Earned Income Credit After Disallowance
•      Form 8863,  Education Credits (American Opportunity, and Lifetime Learning Credits)
•    Schedule A (Form 1040) Itemized Deductions
•    Schedule EIC, Earned Income Credit (Qualifying Child Information)
•    Schedule 2 (Form 1040A) Child and Dependent Care Expenses for Form 1040A Filers

                       Internal Revenue Service