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Daycare and Taxes All things related to Taxes and running a Daycare post here. Topics of tax exemptions, forms, filings, tax write offs, IRS etc.

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Old 03-13-2014, 08:38 AM
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Leigh Leigh is offline
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Default Foster Parent Daycare

I am a foster parent and provide daycare services to foster kids placed with other families. Is the "foster parent daycare" taxable income? I am paid by the state's Child Care Services for a portion of my fee and the remainder is paid by the Department of Social Services (included on my foster care payment check).

I used to be paid the remainder in cash (the foster parents were reimbursed directly), but now that it is included in my check as "foster parent day care", I am questioning myself about whether it IS taxable income. I guess I am just hoping it is not, because a large portion of my income is from foster kids.

Any advice?
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Old 03-13-2014, 11:05 AM
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Default foster care

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Originally Posted by Leigh View Post
I am a foster parent and provide daycare services to foster kids placed with other families. Is the "foster parent daycare" taxable income? I am paid by the state's Child Care Services for a portion of my fee and the remainder is paid by the Department of Social Services (included on my foster care payment check).

I used to be paid the remainder in cash (the foster parents were reimbursed directly), but now that it is included in my check as "foster parent day care", I am questioning myself about whether it IS taxable income. I guess I am just hoping it is not, because a large portion of my income is from foster kids.

Any advice?
Foster care income from a state agency is not taxable. See the IRS article: http://www.irs.gov/irb/2014-4_IRB/ar06.html
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Old 03-13-2014, 12:04 PM
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Foster care income from a state agency is not taxable. See the IRS article: http://www.irs.gov/irb/2014-4_IRB/ar06.html
I know that income from MY OWN foster kids is not taxable. So, if I am being paid to provide daycare for foster kids placed in OTHER homes, is that also not taxable? If so, is ALL of it not taxable, or just the part that comes from the Department of Social Services (the other part comes from the state's Child Care Services-which is actually an office of the Department of Social Services). The income I get from low-income parents who have custody of their kids is taxable. So, for foster kids that are NOT mine, what do I claim as income?
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Old 03-13-2014, 01:06 PM
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Originally Posted by Leigh View Post
I know that income from MY OWN foster kids is not taxable. So, if I am being paid to provide daycare for foster kids placed in OTHER homes, is that also not taxable? If so, is ALL of it not taxable, or just the part that comes from the Department of Social Services (the other part comes from the state's Child Care Services-which is actually an office of the Department of Social Services). The income I get from low-income parents who have custody of their kids is taxable. So, for foster kids that are NOT mine, what do I claim as income?
Yes, it is income. Only the stipend for foster kids placed in your home is not considered income, it is support. Also, money received for respite care(if you are providing respite for another foster family) IS taxable, even if it comes on the same check.
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Old 03-13-2014, 01:18 PM
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Yes, it is income. Only the stipend for foster kids placed in your home is not considered income, it is support. Also, money received for respite care(if you are providing respite for another foster family) IS taxable, even if it comes on the same check.
Thank you. Having it come on the same check is what confused me, and then having it state it was for "foster day care" made me think that maybe I was missing out on a big savings, since it appeared they were paying me as a foster parent instead of daycare provider.
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Old 03-13-2014, 03:00 PM
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Default foster children

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Originally Posted by Leigh View Post
I know that income from MY OWN foster kids is not taxable. So, if I am being paid to provide daycare for foster kids placed in OTHER homes, is that also not taxable? If so, is ALL of it not taxable, or just the part that comes from the Department of Social Services (the other part comes from the state's Child Care Services-which is actually an office of the Department of Social Services). The income I get from low-income parents who have custody of their kids is taxable. So, for foster kids that are NOT mine, what do I claim as income?
I misunderstood. Income you receive for caring for foster children (not living with you - foster child of another parent) is income, whether the money comes from the state or from the parent. Money you receive for respite care is also income.
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Old 03-14-2014, 09:24 AM
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Thank you for the answers. I thought that it was income, but got my hopes up when the state appeared to be treating me as a foster parent!
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