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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28355
Experience:  Taxes, Immigration, Labor Relations
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I am adult foster care provider.The income we receive is from

Customer Question

I am adult foster care provider.The income we receive is from the gov so considered tax free.Me and wife work part time so we reported that income.We told mnsure health exchange we earned 45,000 and got a tax credit for health insurance.The 45,000 was estimated income.But our taxform shows 10,000 in income.exchange now wants income information.Discreprancie,but was counting income after expenses . anyway a little nervous.I called mnsure they just said you should have just not reported it,but don't think this helper had a clue.I called Irs a couple of years ago at beginning of exchange didn't get no answere that helped me.
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.
here are two types of payments that are excluded form income tax. - providing care to qualified foster individuals AND difficulty-of-care payments.Foster care providers. Payments you receive from a state, political subdivision, or a qualified foster care placement agency for providing care to qualified foster individuals in your home generally are not included in your income. However, you must include in your income payments received for the care of more than 5 individuals age 19 or older and certain difficulty of care payments.A qualified foster individual is a person who:1. Is living in a foster family home, and2. Was placed there by:a. An agency of a state or one of its political subdivisions, orb. A qualified foster care placement agency.Difficulty-of-care payments. These are additional payments that are designated by the payer as compensation the additional care that is required , mentally, or emotionally handicapped qualified foster individuals. A state must determine that the additional compensation is needed, and the care the payments are made must be provided in your home..Please see IRS publication 525http://www.irs.gov/pub/irs-pdf/p525.pdfpage 31 - right column -Please verify if these foster care payments are reported as taxable? Are you receiving any kind of tax reporting form for these payments?
Customer: replied 1 year ago.
no
Customer: replied 1 year ago.
in the past year we had 3 clients ,one passed in nov of 2014.we had 2 up till 2 weeks ago.elderly he pays privately.he only has been with us 2 weeks.I will report him come tax time. 92 years old
Expert:  Lev replied 1 year ago.
If you did not receive any reporting forms - that woudl be correct - and no need to report that income on your tax return.That means - the agency already determined - these payments are not taxable - and doesn't report these to the IRS.No need to include these payments into your taxable income.You may keep that publication for your reference just in case someone woudl question why that income is not reported.You may contact the insurance company - and inform them - these are foster care nontaxable payments that you mistakenly reported as your income.