Granddaughter and grandmother
Source: Getty Images

Some Grandparents Can Claim the Child Tax Credit and the EITC

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Mar. 4 2022, Published 4:00 p.m. ET

Thanks to the increased 2021 Child Tax Credit — a part of the American Rescue Plan that President Joe Biden signed into law nearly a year ago now—families in the U.S. get $3,600 per child under 6 years old and $3,000 per child from age 6 to age 17. And yes, grandparents can claim the Child Tax Credit, too, under certain conditions.

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In fact, grandparents may have already received part of this credit. The American Rescue Plan provided millions of families with advance monthly Child Tax Credit payments — worth up to half of their full annual credit amount — between July and December 2021, as the federal government noted on the Child Tax Credit website.

Keep reading for more info.

A grandchild can be a “qualifying child” for the Child Tax Credit, under certain conditions.

As the IRS outlined in an FAQ about eligibility for advance Child Tax Credit payments and the 2021 Child Tax Credit, you qualified for advance Child Tax Credit payments if you had a “qualifying child,” grandchildren included.

If you didn’t receive advance Child Tax Credit payments as they were disbursed between July and December of last year, you can claim the full credit amount on your 2021 tax return during this year’s tax season.

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Grandmother and granddaughter
Source: Getty Images

For the purposes of a 2021 Child Tax Credit, the “qualifying child” has to be the “taxpayer’s son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister, or a descendant of any of them” and must not have turned 18 before January 1, 2022, the IRS explains. For example, a grandchild, niece, or nephew would qualify a taxpayer for the Child Tax Credit, as long as that individual was 17 or younger when 2021 ended.

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There are other eligibility requirements, including:

  • The qualifying child must not have provided more than half of their own support during 2021, they must have lived with the taxpayer for more than half of the year, and they must be claimed as a dependent.
  • The child must not file a joint return with a spouse for 2021, unless they’re filing to claim a refund of withheld tax or estimated tax pay.
  • The qualifying child must have been a U.S. citizen, U.S. national, or U.S. resident alien.

Grandchildren can also qualify taxpayers for the Earned Income Tax Credit.

In a separate explainer, the IRS says that grandchildren — in addition to nieces, nephews, brothers, sisters, half-siblings, and children — can also qualify taxpayers for the Earned Income Tax Credit (EITC).

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The qualifying child must be under age 19 at the end of the year — or under 24 if they were a full-time student for at least five months of the year. In both cases, the qualifying child must be younger than you (or your spouse, if you’re filing a joint return). Also, the qualifying child can be any age if they’re permanently and totally disabled for any part of the year, the IRS says.

The qualifying child must also have lived with you for more than half of the year and must not have filed a joint tax return for reasons other than getting a tax refund on tax withheld from their paycheck. Only one person can claim the EITC for each qualifying child, unless the child’s parents are divorced, separated, or living apart.

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