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Supplemental foster care payments
December 2, 2022
Q. Our county processes payments to foster parents for supplemental care of severely disabled children. These payments are made monthly, in addition to the regular care. Are these payments reportable?
A.
(Answered by IOFM's third-party tax experts)
It looks like you're describing what the tax Code refers to as "difficulty of care" payments. Internal Revenue Code section 131(a) provides that "difficulty of care" payments are excluded from gross income, and for that reason those payments are not…
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