Is it illegal for grandparents to claim their daughters children on their tax return when the mother supported the children? The mother and children live with her parents. The mother pays for part of the food bill and electric bill for the household, pays for child care and does all of the clothes shopping and buying of medicine for the children. The mother also used a flexible spending account to help with the cost of child care. Now her parents are asking her to claim her children on their taxes stating that it's because she lives with them. If the daughter allows them to claim one or both her children how would she explain the Dependent Care Flexible Spending account? When doing the dependent care claim form she listed both children and the amount she paid for each child bi-weekly. If anyone could help I would greatly appreciate it.