At 66, a Grandmother Raising Her Grandson Could Still Claim Tax Credits Like a Parent in Her 30s

Quick Read

• Federal tax rules do not consider a grandparent’s age, so a 66-year-old raising a grandson may qualify for the same child tax credit and earned income credit as a parent in their 30s.

• When a grandparent claims a qualifying grandchild, the earned income credit no longer has the usual age-65 upper limit, and the income cutoff for a one-child claim is $50,434.

• If a parent lives with the grandparent and claims the child, that parent takes priority. When no parent files the claim, grandparents face a stricter adjusted gross income tiebreaker.

A 66-year-old grandparent who is raising a grandson may be eligible for federal tax credits that many people assume are reserved for parents. The key factors are the child’s relationship to the taxpayer and where the child lives, not the taxpayer’s age.

Because age is not part of the test, a grandparent caring for a grandchild can sometimes qualify for the same child tax credit and earned income credit that a parent in their 30s could claim.

A Grandson Can Count as a Qualifying Child

How Much the Credits Can Be Worth

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The credit begins to phase out once income rises above $200,000, or $400,000 for married couples filing jointly. Both the grandparent and the grandson need Social Security numbers that are valid for work and issued before the tax return is due, according to IRS Publication 505.

The IRS updates the one-child figures each year. The 25-to-65 age range applies only to workers without a qualifying child. When a taxpayer claims a grandson, there is no upper age limit.

How This Works for a Retired Grandparent

Social Security retirement benefits do not count as earned income. So a grandparent with no job cannot claim the earned income credit, and the refundable portion of the child tax credit falls to zero. The nonrefundable part of the child tax credit may still reduce tax owed, but if the taxpayer owes little or no income tax, the value may be limited.

An Example Involving One Grandmother

In one example, a grandmother is unmarried and works part-time. Her grandson is in grade school, has a valid Social Security number, and lived with her all year. Neither parent lives in the home. Her earnings, adjusted gross income, and investment income all remain below the earned income credit limits, and she pays for after-school care.

Rules That Can Disqualify the Claim

If a parent lives with the grandparent and claims the child, that parent has priority. If a parent could claim the child but does not, the grandparent may only claim him if their adjusted gross income is higher than each parent’s AGI, according to IRS Publication 501.

Paid tax preparers face a $650 penalty for each head of household, child tax credit, or earned income credit claim they file without meeting due diligence requirements, so they usually ask many questions.

A grandson may also qualify for Social Security benefits on a grandparent’s work record. In general, Social Security requires that the child’s parents have died or be disabled, or that the grandparent legally adopted him, according to the SSA.

He must also have begun living with the grandparent before age 18 and received at least half of his support from them. Social Security makes the final decision on eligibility.

One Document Worth Keeping

Each of these benefits depends on proving that the grandson lived with the grandparent for more than half the year. A school, medical, or child care record showing that his address matches the grandparent’s is the document the IRS most often requests when reviewing these claims.

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