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What would be the qulifications for claiming your sister as a dependent. And if that is not possible, are there any care-giver deductions available or other alternatives for deducting the money you spent in providing for her and her 2 kids? If so, what form would need to be filed?

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You can't claim any of them. Sorry. That's the law. There's no deductions either for her or the kids. Dependents have to be with you for a full twelve months. They can't be on welfare, SNAP or get child support.
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