Adult Foster Care Stipend

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Adult Foster Care Stipend

Postby Clamo88 » Mon Apr 30, 2018 6:58 pm

Q: Is a foster care stipend for caring for one's parent(s) treated the same as for children, i.e., as excludable income?
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Re: Adult Foster Care Stipend

Postby charteroakadmin » Thu May 17, 2018 9:56 am

A: No, child support, whether from a parent or a government agency, has a specific exclusion under TEGL 12-06. However, DOL has held that payments made for the care of adults may fall under the TEGL exception for income exclusion "as required by federal law." DOL has specifically held that "difficulty-of-care" payments under a Medicaid waiver are excluded because the IRS has said the payments are not taxable income:

    Excluded from Taxes: ... ly-taxable
    (Per IRS Notice 2014 - 7) For those families receiving IHSS as a result of a Medicaid Waiver, the income you earn by providing in-home care to a disabled person can be excluded from gross income.

    The IRS has issued guidance that treats qualified Medicaid waiver payments as difficulty-of-care payments under Code Sec. 131(c) that are excludable as qualified foster care payments, and this treatment applies whether the care provider is related or unrelated to the eligible individual.
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