Residency

• Your foster child must reside with you for more than half of the year for you to claim her as a dependent. In the case of divorce of separation, the custodial parent is generally the person who is able to claim foster children as dependents. If you and your spouse have not yet come to a formal custody arrangement, the IRS will consider the parent with whom the children spend the most number of nights with during the year as the custodial parent. If the foster children spend an equal amount of nights during the year with both you and your spouse, the IRS considers the parent who makes the highest adjusted gross income, or AGI, as the custodial parent.
  
  

Financial Dependency

• If you have foster children and someone else can claim you as a dependent, you cannot claim anyone, including foster children, as dependents on your taxes. If no one else can claim you as a dependent, you may claim your foster children on your taxes if you provided more than half of the financial support of the children during the year. If the foster children provided more than half their own financial support during the year, you cannot claim them.
  
  

Age Requirements

• Foster children must be 19 years old or younger for you to claim them as dependents on your taxes. The IRS increases this age limit to 24 if the children are full-time students for at least five months of the year. The IRS does not give a specific number of college credit hours the children must be taking for the IRS to consider them full-time students. Typically, full-time status at least 12 credit hours of classes. The IRS also increases the age limit from 19 to 24 for permanently disabled children.
  
  

Tax Credits

• Having qualifying foster children allows you to claim them as dependents on your taxes but does not automatically allow you the full benefit of any other child tax credits. Common credits include the child tax credit and the credit for dependent care expenses. To receive the child tax credit, the children must be 17 years old or younger and a U.S. resident, citizen or national. To receive a credit for dependent care expenses, the children must be 13 years old or younger or permanently disabled.