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webersandi
New Member

I am so confused. I keep reading that the money I received for foster care placement is non taxable income. However, I received a 1099-misc for this money.

When I add it to wages, I lose over $600 in my refund.  So, how do I add it as nontaxable income?  Also, where can I claim expenses for the foster care placement?  Some of the money on the 1099-misc was reimbursement for purchases I made for the child.  Thank you.
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Accepted Solutions
NancyG
New Member

I am so confused. I keep reading that the money I received for foster care placement is non taxable income. However, I received a 1099-misc for this money.

Foster care payments are non-taxable.  Do not enter the 1099-Misc if you receive one.

Internal Revenue Bulletin:  2014-4 

Section 131(a) excludes qualified foster care payments from the gross income of a foster care provider.

Section 131(b)(1) defines a qualified foster care payment, in part, as any payment under a foster care program of a state or a political subdivision that is either (1) paid to the foster care provider for caring for a qualified foster individual in the foster care provider’s home, or (2) a difficulty of care payment. 

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2 Replies
NancyG
New Member

I am so confused. I keep reading that the money I received for foster care placement is non taxable income. However, I received a 1099-misc for this money.

Foster care payments are non-taxable.  Do not enter the 1099-Misc if you receive one.

Internal Revenue Bulletin:  2014-4 

Section 131(a) excludes qualified foster care payments from the gross income of a foster care provider.

Section 131(b)(1) defines a qualified foster care payment, in part, as any payment under a foster care program of a state or a political subdivision that is either (1) paid to the foster care provider for caring for a qualified foster individual in the foster care provider’s home, or (2) a difficulty of care payment. 

tinagraves4
New Member

I am so confused. I keep reading that the money I received for foster care placement is non taxable income. However, I received a 1099-misc for this money.

Won't this open me up for a audit by not reporting and explaining why I am not claiming the money on the 1099?

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