In my understanding you either claim the child as a dependent (in which case you can't claim anything else) or else you don't claim them as a dependent but any monies spent on them above and beyond your reimbursed per diem can be considered charitable deductions.
Sort of...there are some factors that can come into play.
If the child is your qualifying child AND goal is not adoption of the child by you (ie, the child has been placed in your home with a goal of RU and that goal stands at RU as of 12/31/11) you can claim them both as a qualifying child AND the support provided above your stipend as a charitable deduction (in all cases you will need to prove the expenses paid were in excess of your agency provided support)
If the child is your qualifying child and the established goal is adoption by you, you cannot claim support as a charitable contribution.
If this child is not your qualifying child or qualifying relative you can deduct support above your stipend as a charitable contribution.
Foster parents. You may be able to deduct as a charitable contribution some of the costs of a foster parent (foster care provider) if have no profit motive in providing the foster care and are not, in fact, making a profit. A qualified organization must designate the individuals you take into your home for foster care.
You can deduct expenses that meet both of the following requirements.
1. They are unreimbursed out-of-pocket expenses to feed, clothe, and care for the foster child.
2. They must be mainly to benefit the qualified organization.
Unreimbursed expenses that you cannot deduct as charitable contributions may be considered support provided by you in determining whether you can claim the foster child as a dependent. For details, see Publication 501, Exemptions, Standard Deduction, and Filing Information.
So what that means...
If you need to prove you supported the child in order to claim him/her (test to be a qualifying relative), you can choose to claim that you provided more than 50% of the support (this is 50% that YOU provided. You need to prove that above what the agency reimbursed you that you provided more than 50% of the child's support), in which case you cannot ALSO claim that support as a charitable contribution.
In my case, my FFS meets all 5 requirements to be my qualifying child. I am not using the unreimbursed expenses as support in order to determine he is a qualifying relative, therefore I can claim his unreimbursed expenses as a charitable contribution.
In my AD's case. In 2010 she was a foster child with a goal of RU. If her case had stayed that way I could have claimed her as my qualifying child and claimed expenses above my stipend. However, in November 2010 her case was changed to adoption by foster parent. So then I am fostering her with the goal of adopting her and I can no longer claim that I am fostering her for the benefit of an outside organization.
Basically it boils down to, you can't claim it as support AND as a charitable contribution. It's one or the other. To be a qualifying child they only need to meet the 5 criteria to be a qualifying child...and support provided by the parent doesn't factor into that test (unless the child is considered a qualifying child of more than one person).
