Is the foster care stipend taxable? Is it considered income? What is it for?

Money is generally an uncomfortable topic, made more uncomfortable when discussing foster care. Well, foster care is full of uncomfortable conversations so let’s dive in together!

What is the foster care stipend?

The foster care stipend is money received by a caregiver to provide care for a child or youth in the custody of a state child welfare agency (in Massachusetts, that’s the Department of Children and Families, or DCF). The amount can vary based on the kind of foster care one is providing (Comprehensive vs. Unrestricted), but the rate is determined by the House Committee on Ways and Means.

Why do foster parents receive that stipend?

Most folks could not add an additional member to their family without financial support. The stipend is that support. Foster parents often supplement their own money for additional costs, because kids are expensive and the stipend often does not cover everything. The stipend is also delayed by one month, so foster parents need to have the financial ability to support a child when they first arrive in their home and are not yet receiving the stipend. The stipend exists to allow foster parents the ability to provide for the needs and joys of a child or youth in foster care.

Is a foster care stipend income for the caregiver?

No.

Full stop, a one word sentence- No.

The foster care stipend is money that is to be used for the needs of the child- haircuts, after or before school care, food, backpacks, diapers, wipes, bedding, school field trip fees, yearbooks, gas in your car to drive kids to appointments, gifts, fun stuff like going to the movies, etc.

When people apply to be foster parents, one of the questions we ask right away is about their source of income and if it meets their needs. The reason is that foster care is not a job.

You cannot apply for unemployment if you do not have a placement or your home is closed by a foster care agency. The foster care stipend is not income and is not to be used for personal gain.

Is the foster care stipend taxable?

No. The stipend is not an income, it is considered a “difficulty of care stipend.” You can speak with a tax professional for more information about this.

Are expenses related to caring for a child or youth in foster care deductible?

Definitely speak with your trusted tax professional about this. We are a foster care agency, not a tax organization and want you to get the most precise information available!

Are there other financial supports available for the needs a child might have?

Yes. Some of that depends of the kind of care you provide (Comprehensive vs. Unrestricted), but there are supports for things like extracurricular activities, special needs a child might have that require durable equipment, resources like MassHealth for health related supplies, and some private organizations that assist with things like camp (though that is not typically fully paid for- foster parents contribute). Additionally, children and youth in care receive a clothing check each quarter to help purchase the next season’s clothing. This doesn’t always cover everything, but definitely helps! Here at JRI, we have cultivated a generous group of folks we refer to as “Foster Friends” who often pitch in with donations around the winter holidays, for back to school supplies, and when kids enter care with very little.

Conclusion

Foster care is a work of heart. It is not a form of employment, though requires a deep commitment and set of obligations. Just like parenting a child through biology, you will be expected to put the child’s needs before your own and provide them with what they need. The stipend is intended to assist foster parents in doing so, but it is not to be used to supplement one’s income. The stipend is not taxable, because it is not income. It is a support to meet the needs of a child or youth in care.

If you are ready to open your heart and home to a child in care, reach out today. We would love to hear from you.