Can Mia and Judy claim their niece and nephew as dependents?

Mia and Judy can indeed claim their niece and nephew as dependents if they provide full financial support and if the children live with them. In determining whether a child qualifies as a dependent, the IRS considers several factors, including the relationship to the taxpayer, whether the child lives with the taxpayer for more than half the year, and if the taxpayer provides more than half of the child's financial support.

In this case, since Mia and Judy provide full financial support, that suggests they meet the requirement of supporting more than half of the children's financial needs. Additionally, if the children live with them, this establishes the necessary relationship and residency requirement for dependency.

The other options present misunderstandings about the criteria for claiming a dependent. The biological relationship cited in one option does not exclude nieces and nephews, as the IRS allows for relatives beyond just biological children to be claimed if certain conditions are met. Another option incorrectly suggests that they do not qualify as children without considering the broader definition of qualifying dependents, which includes siblings and their children. Lastly, the age restriction mentioned in the final option is unnecessary; dependents can be older than 18 if they are students or meet other specific criteria.