Yes, if your grandchild meets the IRS tests for a qualifying child you can claim them as a dependent.

Can I claim my grandkids if they don’t live with me?

Yes. As long as your grandmother meets the tests for claiming a your child as a dependent. Key information is that your child will not be a qualifying child because she does not live with your grandmother, however she can be a qualifying relative for tax purposes.

Can grandparent claim child care expenses?

You may be entitled to childcare credits if you are a grandparent or other family member who cares for a child aged under 12, usually while the parent is working. Those eligible must be over the age of 16 and below the state pension age (when they cared for the child).

Can a grandparent pay for a grandchild’s tuition?

Finally, you can pay directly for the grandchild’s tuition or medical expenses, even if these costs exceed the annual gift tax exclusion. In this case, all payments must go straight to the provider of these services.

Can a grandparent pay for a day care?

“Grandparents can cover these costs as long as this is an educational institution with a regularly enrolled student body,” said Fishkind. “Day-care drop-off doesn’t work,” he said.

Can a grandparents loan be considered a gift?

Grandparents’ loan payments will be considered gifts, so any amount in excess of the annual exclusion amount ($15,000 per individual in 2019; $30,000 for married couples who split gifts) will use up a grandparent’s (and a grandparent’s spouse’s if split) remaining lifetime estate and gift tax exemption amount ($11.4 million per individual in 2019).

What’s the best way to pay your grandchildren?

The tax strategy for paying grandchildren, however, isn’t by direct payment but to 1099 your children and the support company they establish to supervise and hire their children, i.e., your grandkids. This way, they can pay the kids under the “children under 18” strategy and save you from giving the grandkids a W-2 or 1099.