My daughter has two children and she lives with the children 's biological father but they have never married. Neither of the parents currently work but my daughter is enrolled in college and they receive state assistance to live on. The children's grandmother for several years now ( and this year) claimed them on her tax return. She has helped pay some bills throughout the year as well as I have but everything I have read I was under the impression that to claim them not only did you have to provide more than half the support which she has helped a lot but their main support has been state assistance and they certainly did not live with her. Is this legal?

Probably not, unless the grandmother can PROVE she provided more than half of their total support.