GOV'T. PAYMENT FOR CARE OF WAYWARD KIDS

[BLACK BART]

Does anybody happen to know if such is taxable?  Guy left sack of junk with me to be sorted out after 4-15 & I'm  doing it now.  In the debris are three check stubs from AR Dep't. of Human Services listing one month's payment for three juvenile reprobates - $50 for mild cases, $300 for the moderately tough, and $410 for those in which karate skills would be helpful and it's a good idea to lock the bedroom door at night.

I've heard about this program over the years from different people; the state farms out the troubled kids to any soul willing to take them in and hopefully rehabilitate them.  But, I've never had a client who actually did it (well, I know one who applied but was turned down -- good thing too; I wouldn't leave my hamster with them).  But anyway, there's no 1099 or anything else here and the client's clueless.  There's a phone number on the check stub, but I don't want to call and ask "Is this taxable" to somebody who's going to say "You're a tax preparer.  You're asking me?"  Probably will end up doing that anyway, but thought I'd give it a shot here first.

[Medlin Software, Dennis]

Have received foster care payments, respite care payments, and adoption assistance, none of which were reportable/taxable to us.  It has been many years, but I have faint memory of doing the research.  There must be some official phrase, term, or title for the payments which you can research.

[jklcpa]

Normal foster care payments aren't taxable if they fall under the 3 criteria of sec 131.  You could try researching "difficulty of care" payments to see if these payments fall into that category.  Also, google for "Notice 2014-7" or search for it directly on the IRS site. Sorry, I'm on my tablet and can't get a link without it downloading the doc itself. 

 

 

[BLACK BART]

https://www.jklasser.com/news/when-are-foster-care-payments-tax-free/

Got it here; thanks anyway.  The quoted rates were wrong (thought that $50 - a partial month - was a bit light); per DHS it's $300-400-500 depending on age.  All's well that ends well.

 

Those old yellow book guys and TurboTax are gettin' about as good as CCH.