Qualifying Child Question

[Ephesians3-14]

My client has a 15 yr old child (formerly a foster child who my client adopted in 2018).

In 2021, apparently the kid had severe mental problems and was first sent to a special boarding school (for troubled kids) and then later to a mental facility where he lived the rest of the year. His expenses were paid for by my client's health insurance policy and whatever wasn't paid through his health insurance was covered by Medicaid. My client paid for some other misc expenses here and there.

In July, my client legal turned the kid back over to the state and he was no longer legally his son.

Can he claim him as a dependent for 2021? The question is important to my client because if he can't then he also relinquishes the carry over adoption tax credit ($7,000) that he was otherwise eligible to claim. 

[TaxGuyBill]

It seems to me they can claim him.

The school and hospital were temporary absences, so including that, as long as the child was with them for at least half of the year, you should be good.

[Ephesians3-14]

I'm not sure that they were "temporary" absences because the kid never returned home after going there (unlike a college absence). 

What about the support test? If my client's health insurance provider and Medicaid were paying for the kid's room and board for Jan 1 - early July (when my client legally dissolved the parental relationship with the kid), it seems that my client didn't really pay for more than one half of his support either. Thoughts?

[TaxGuyBill]

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@Ephesians3-14 wrote:

I'm not sure that they were "temporary" absences because the kid never returned home after going there (unlike a college absence). 

What about the support test? ... it seems that my client didn't really pay for more than one half of his support either.

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I interpreted that the intent at that time was for the child to return home, if he got somewhat better.  If so, that would be a temporary absence.

The support test for a Qualifying Child is that the CHILD did not pay for over half of his own support.  The parent is NOT required to pay for over half.

[Ephesians3-14]

EDIT: I think I do agree with you that the kid attending a boarding school or metal hospital would qualify as a temporary absence. So we're good there.

Now I'm just wondering if my client would meet the support test given he really didn't pay for any of his child's cost other than a few expenses here and there. So I think that's what in play here. Any thought about that or how to come to a conclusion that he di or did not meet the support test given my client's health insurance provider and/or Medicaid basically picked up the tab.

[Ephesians3-14]

Oh OK - and since he would be a Qualifying Child (NOT a Qualifying Relative), there is no support test, right?

[TaxGuyBill · Accepted solution]

The "support test" for a Qualifying Child is that the child did not pay for over half of their own expenses.

So even if all expenses were paid by a third party and the parent paid nothing, they would still qualify as a Qualifying Child because the child did not pay for half of their own expenses.

[IRonMaN]

In case you are looking for a second, I believe Bill is on the money.

[jeffmcpa2010]

I am just wondering if the fact that the child was "Not Legally His Child" on the last day of the year matters. (I don't know the answer but if it were my client, I would double check into that question)