In February 2016, the New York State Office of Children and Family Services (OCFS) resolved a long-standing problem that prevented foster parents and relatives raising children from obtaining a child’s social security number. This effectively blocked the foster parent and relatives from claiming children as dependents for tax purposes. We are grateful to the leadership at OCFS for responding to the calls of the Coalition and others to remedy this problem.
This page contains information about federal guidelines for claiming a child placed in your homes on your taxes and explains the process for requesting a child’s security number from your local department of social services or the Administration for Children’s Services (ACS). Links to documents, including the required OCFS form and policy can be found in the “Required Documents” box on the left side of this page.
To be considered a dependent for tax purposes, an individual must be either the taxpayer’s “qualifying child” or “qualifying relative,” as those terms are defined in IRC Section 152. A qualifying child must meet four tests: (1) relationship, (2) age, (3) residency, and (4) self-support. Depending on the circumstances, the foster child may meet the four tests.
- Relationship: In general, a child in foster care meets the relationship test if he or she is an “eligible foster child,” which is defined in IRC Sec. 152(f) as “an individual who is lawfully placed with the taxpayer by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction.” For relatives raising children, the child must be a descendant of your son, daughter, stepchild, brother, sister, half brother, half sister, stepbrother, stepsister or foster child, which includes grandchildren, nieces, nephews, grandnieces and grandnephews, etc.
- Age: A child meets the age test if he or she is (a) under 19 at the close of the calendar year, (b) a full-time student who is under 24 at the close of the tax year, or (c) any age if permanently and totally disabled.
- Residency: Requires that the child live with the taxpayer (i.e. foster parent) for more than one-half the tax year.
- Self-Support: Requires that the child does not provide more than half his or her own support during the tax year. The amount of stipend support paid by the local department of social services, agency or the Administration for Children’s Services (ACS) does not matter and is not considered as support provided by the child for these purposes. Effectively, this means that all children in foster care who meet the other three requirements may be claimed by the foster parent. Similarly, child-only temporary assistance grants received by relatives do not disqualify relatives from claiming children as dependents.
These guidelines are explained in detail in IRS publication 501: Exemptions, Standard Deduction and Filing Information. Click on the IRS logo above to download. Page 12 of this document contains a very clear chart about this.
How to Request a Child’s Social Security Number
You must fill out form OCFS-4743 and submit the completed form to your local department of social services or the agency through which the child is placed in your home (the voluntary agency). Please note that voluntary agencies are not authorized to directly release the social security number (SSN) of the child. Only the department that has legal custody of the child (ACS or the local department of social services) can release the SSN. Your request will be forwarded to them.
ACS or the LDSS will verify:
- that you were a certified foster parent(s) or were approved during all or some portion of the tax year listed on the request
- the child whose SSN is being requested was in foster care during all or some portion of the tax year listed on the request
- the child resided in the approved or certified foster parent’s home that is making the request for all or some portion of the tax year listed on the request.
Upon verification of the above items and the approval of the request, the LDSS will record the child’s SSN on the bottom of the form and may either hand deliver or mail a copy of the approved form to you. If you are certified through a voluntary agency, the form may be returned to them and they will in turn pass it along to you.
If the request is not approved, the LDSS must complete the bottom of the form OCFS-4743 and state the reason why the request was not approved. For example, if the child whose SSN is requested did not reside in the foster home during the tax year listed, the LDSS cannot supply the number to you. The LDSS may then hand deliver or mail a copy of the denied form to you.
It is important to note that this process allows you to use the child’s social security number only for tax purposes.
What Happens if the Child is Claiming as Dependent by Someone Else
Federal regulations state the only one person may claim a child as a dependent for tax purposes. While it appears that cases are rare, it is possible for a parent or even another foster parent (in the case where a child moved from one home to another during the year) to claim a child you have claimed on your tax return. If this happens, be sure that you have documentation from your local department, agency or ACS that verifies the dates the child was placed in your home. Hold onto this documentation or be certain that you can obtain it, as there is often delay in cases where the IRS detects a conflict such as this.
If You’ve Already Filed Your Taxes Without Claiming The Child
If you’ve already filed your return without claiming a child you were entitled to claim as a dependent, it is possible to file and amended return. Visit irs.gov, call the IRS or consultant a tax preparer to learn how.
Another Consideration: The Earned Income and Child Tax Credits
Many foster and kinship families raising children qualify for federal tax credits and don’t even know it. The Earned Income (EIC) and Child Tax Credit (CTC) are federal tax benefits for low and moderate income wage earners. Some people can receive a refund even if they don’t owe income tax and many can receive both credits. For example, in 2013 a married couple and raising two children in their home for more than half the year with a joint income of $50,198 could get an EIC of up to $5,572. A single person in the same scenario can earn up to $44,846 and still quality for the EIC. Wage earners raising children can get an even larger refund by also claimng the CTC.
For purposes of the EIC and CTC, a foster child must be placed with the wage earner by an authorized placement agency, state agency, or court. The child must live with the wage earner for more than half the tax year and meet the other requirements for qualifying child. Foster payments do not generally count as income when determining eligibility for the EIC or CTC. For more information see: IRS Publication 596, the Earned Income Tax Credit and IRS Publication 972, the Child Tax Credit
A Note for Parents in the Process of Adopting: The Adoption Taxpayer Identification Number (ATIN)
An Adoption Taxpayer Identification Number (ATIN) can be issued by the Internal Revenue Service as a temporary taxpayer identification number for a child in a domestic adoption where the adopting taxpayers do not have and/or are unable to obtain the child’s Social Security Number (SSN). If you are in the process of adopting a child, are eligible to claim the child as your dependent, and you don’t have the child’s SSN, then you may request an ATIN in order to claim the child as a dependent and (if eligible) to claim the child care credit. See the IRS website for qualifications and information on requesting an ATIN.