COVID‐19 and its related policy measures have increased the psychological distress of individuals, including grandparent kinship caregivers. Guided by the Resilience Model of Family Stress, Adjustment, and Adaptation, this study examines relationships between material hardship, parenting stress, social support, resilience and psychological distress of grandparent kinship caregivers during the COVID‐19 pandemic, as well as the moderating role of kinship license status on these relationships. Kinship care licensing is a prerequisite to receiving financial assistance and other supporting services from the government. We administered a cross‐sectional survey of grandparent kinship caregivers (N = 362) in the United States. Logistic regression results indicated that material hardship was associated with higher odds of experiencing psychological distress, whereas resilience and social support were associated with lower odds. Kinship license status moderated the relationships of social support and resilience with psychological distress. Results suggest that additional emergency funds and more tailored financial services should be provided to meet material needs, and interventions with a focus on resilience and social support are particularly needed. The moderating effects of license status indicate that some interventions should be specifically implemented among licensed kinship caregivers, whereas parallel services should be provided to kinship caregivers regardless of their license status.