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Based on the following information, the income is not included in your income. SEE BELOW:
The notice provides that the Service will treat these Medicaid waiver payments as difficulty of care payments excludable from gross income under § 131 of the Internal Revenue Code (Code).
Difficulty-of-care payments are compensation for providing additional care for qualified foster individuals if the payments are necessitated by the physical, mental, or emotional needs of the individual after the state has determined that the foster care provider needs additional compensation in order to deal with the individual's handicaps. These difficulty-of-care payments are also generally excluded from gross income. However, if the payments are received for more than 10 qualified foster individuals under age 19 or for more than five qualified foster individuals over the age of 18, they must be included in your income. If you receive payments to maintain space in your home for emergency foster care, you must include these payments in gross income. The IRS considers you to be a self-employed person in business as a provider of foster care if you receive foster care payments that must be included in your gross income. -
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