Foster parents, you may be eligible to claim the Earned Income Tax Credit

January 15, 2019

The Earned Income Tax Credit (EITC) is a federal and state tax credit for working families who earn less than $55,000 a year. Did you know that as a foster family you may be eligible to claim the EITC, which is worth up to $6,431 for the 2018 tax year? One in four families in Colorado are missing out on claiming the EITC and the IRS identifies foster parents as one of the groups most likely missing out.

For the purposes of determining a “qualifying child” for claiming the EITC, a foster child is defined as:

“A child placed with you by an authorized placement agency, such as a licensed foster care agency, state agency or court.”

Review the following information to learn more about claiming the EITC and consult with a professional tax prepare for advice specific to your situation.

  • To claim the EITC, each filer listed on the tax return and any child claimed for the credit must have a valid social security number (SSN).
  • To claim the Child Tax Credit (CTC), qualifying children must have a valid SSN. Parents can have either a SSN or an Individual Taxpayer Identification Number (ITIN).
  • Legal guardianship is not required to claim the EITC or CTC.
  • Foster care reimbursements do not count as income when determining eligibility for the EITC or CTC.
  • A foster child does not have to be in your home at the end of the year to be claimed; however, they must have lived with the foster parent for more than half the year.
  • Foster child must be under age 19 at the end of the tax year.1
  • Unless the child is related to the foster parent, a foster youth who has transitioned out of the foster care system can no longer be claimed for the EITC or CTC.
  • Some foster and adoptive parents may be eligible to claim the Child and Dependent Care Credit.

Do you need help filing your taxes? The Piton Foundation’s Get Ahead Colorado program offers free tax preparation services in Spanish and English for families that earn less than $55,000. Learn more.

Do you work with families? Download a free tax preparation flier in English and Spanish.

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