Foster child

[kathyc2]

TP has foster child placed by state in their home from Dec 2019 to July 14, 2020.  

Am I correct that the money received from state does not count as child providing own support?

Since it was over 1/2 year they are entitled to CTC?

And also qualifies for add'l 1,100 for recovery rebate?

[Medlin Software, Dennis]

It has been a decade since we last had official foster kids, so ymmv.  Back then, the amount of funding simply was not enough to be more than 1/2 of the support (iow, we spent more than the basic rate, out of pocket, especially for short term placements - getting clothes, toys, hair cuts, etc.).  The amount was not countable income for the foster parents, unless it was an actual business (such as a group home).

The two caveats: Certain placements can come with additional funding (over the basic state rate), which could be enough to make 1/2 support come into play, if it counts.  Usually comes with medical coverage paid for, so the value of that could play into the calculation (if required).

[DANRVAN]

18 hours ago, kathyc2 said:

Am I correct that the money received from state does not count as child providing own support?

It is support not provided by the taxpayer.

 

18 hours ago, kathyc2 said:

Since it was over 1/2 year they are entitled to CTC?

I believe once you get past the support test you follow the qualifying child rules for CTC and stimulus.

[kathyc2]

Actually, the support test doesn't really apply, since payments from state do not count as child providing over 1/2 of their own support.  That's what I was thinking, but hadn't found verification of it before I posted.  |From Pub 501:

Example 2.

 

You provided $3,000 toward your 10-year-old foster child's support for the year. The state government provided $4,000, which is considered support provided by the state, not by the child. See Support provided by the state (welfare, food benefits, housing, etc.) , later. Your foster child didn't provide more than half of her own support for the year.

[DANRVAN]

28 minutes ago, kathyc2 said:

Actually, the support test doesn't really apply, since payments from state do not count as child providing over 1/2 of their own support. 

and you pass the support test for qualifying child.