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Christopher Phelps
Christopher Phelps, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2710
Experience:  CPA, CFP, PFS, Tax Practitioner 21 Years, Member AICPA/CSCPA Tax/Financial Planning Committee Member
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Is money received from providing foster care taxable income

Customer Question

I live in NE and receive social security disability. I am considered foster care and need to know if money I receive for providing care is considered income or child support and do I need to claim it?
Submitted: 10 years ago.
Category: Tax
Expert:  Christopher Phelps replied 10 years ago.

Per IRC Sec. 131 gross income shall not include amounts received by a foster care provider during the taxable year as qualified foster care payments. The term "qualified foster care payment" means any payment made pursuant to a foster care program of a State or political subdivision which is paid to the foster care provider for caring for a qualified foster individual in the foster care provider's home.

The botXXXXX XXXXXne is if you have had foster children placed with you by a state agency or a state qualified foster care placement agency for which you are paid by the state (or the agency), then such payments are not taxable income.

Because it is impossible for me to identify and consider ALL the relevant facts, this advice is not intended or written to be used for the purpose of avoiding penalties, and cannot be used for that purpose.