How to Claim a Foster Child on Your Federal Taxes

Congress has long recognized the need to exempt a portion of parental income to account for the cost of raising a child. Tax rules provide for the same deductions and exemptions for foster children as they do for natural or adopted children, provided the child is an eligible foster child. For tax purposes, an eligible foster child is a child who has been placed in your care by an authorized placement agency or by a court decree.

• 1

  Download and print IRS Form 1040 - Individual Income Tax Return. You cannot use Form 1040 EZ if you want to claim dependents. You can find a link to IRS Form 1040 in the link in the Resources section of this article.

• 2

  Gather all your W-2 forms, 1099 forms, and other records of income from the previous year. You need these forms to populate the data on your Form 1040. You will also need profit and loss statements from any companies you own and records of any alimony paid or received, any unemployment compensation, and any IRA distributions during the previous year.

• 3

  Fill out the personal information section at the top of the form. You will need your spouse's Social Security number if you intend to file jointly.

• 4

  Calculate your adjusted gross income by following the instructions on page 1 of Form 1040 and in the instruction booklet available at the link in the Resources section.

• 5

  Calculate your taxes and credits. Be sure you account for all your children, including eligible foster children, on line 42 of the Form 1040. If you paid for child care expenses to care for any children, you may also be able to claim the Credit for Child and Dependent Care Expenses on line 48. You will have to attach a copy of IRS Form 2441. Also, be sure to claim all children under the Child Tax Credit on line 42.

• 6

  Mail the completed return, plus any supporting documentation and schedules, to the IRS servicing center specified at the end of the Form 1040 instructions by the April 15 due date, unless you apply for an extension.