How Much Do Foster Parents Get Paid?

Foster parenting provides a supportive home for children unable to live with birth families. Financial assistance helps foster parents meet the children’s needs. Understanding these payments is important for prospective foster parents.

The Purpose of Foster Care Payments

Foster care payments are reimbursements to cover child-raising expenses, not a salary. They ensure foster children receive proper care, meet daily needs, and have a stable environment.

These reimbursements cover essential costs like food, clothing, shelter, and personal care items. They also cover transportation for school, medical appointments, or family visitations. Funds also cover other daily living expenses, including school supplies, extracurricular activity fees, and a personal allowance.

Factors Determining Payment Amounts

Financial support for foster parents varies based on several factors, aligning with each child’s specific needs and local cost of living. These factors include the child’s age, specific needs, and geographic location.

Payment amounts are influenced by the child’s age. Payments generally increase with age, recognizing higher costs for older children. For example, monthly rates might be around $958 for ages 0-5, increasing to $963 for 6-12, and $1,022 for 13-20. Daily rates can also vary, such as $19.70-$21.90 for 0-11 and $21.70-$23.90 for 12 and older.

A child’s specific needs and required level of care also impact reimbursement rates. Children with special medical, behavioral, emotional, or developmental needs often qualify for higher “difficulty of care” payments or specialized rates. These rates compensate foster parents for additional time and resources. For example, a basic daily rate might be around $27.07, while a child requiring specialized care could generate a rate of $57.86 per day.

Some states categorize needs into levels, with higher levels (e.g., Level 3 or 4) for advanced or intensive needs resulting in significantly higher monthly payments, sometimes thousands of dollars. Levels are determined by assessing physical, behavioral/emotional, health, and educational needs.

Payment amounts also vary by state, county, or agency. Each jurisdiction sets its own rates, leading to a wide range of daily or monthly reimbursements. For example, monthly stipends can range from $187 to over $1,000. Daily rates might be $25-$35, or over $100 for children with significant needs. Prospective foster parents should contact their local child welfare agency or a private foster care organization for precise rate information.

Additional Financial Support and Resources

Beyond standard reimbursements, foster parents can access additional financial support and resources for specific needs. These benefits help ensure a foster child’s well-being without undue financial strain.

Many jurisdictions provide clothing allowances, either as a one-time payment upon placement or annually. While monthly payments include clothing, these allowances help with initial wardrobe or back-to-school expenses. For example, some states offer initial clothing supplements ($210-$500) and holiday allowances.

Foster children receive medical and dental coverage through programs like Medicaid or state health insurance. This covers medical, dental, and often mental health services, relieving foster parents of direct costs. They are usually eligible for Medicaid, ensuring access to necessary healthcare, including checkups, dental visits, and prescriptions.

Funds may be available for children with unique requirements, such as specialized equipment, therapy, tutoring, or extracurricular activities. These funds help foster children access resources for their development and challenges. The availability and criteria for these funds vary by agency and the child’s assessed needs.

Respite care reimbursement provides financial assistance for short-term care from an approved caregiver. This allows foster parents planned breaks, ensuring their well-being while the child remains safe. Details for accessing respite care and reimbursement are outlined by the placing agency.

For children transitioning from foster care to adoption, ongoing financial support through adoption subsidies may be available. These subsidies can provide continued financial assistance to adoptive families, recognizing the long-term commitment to a child with ongoing needs.

Tax Considerations for Foster Parents

Understanding tax implications of foster care payments is important, as they are generally treated differently from regular income. The Internal Revenue Code (IRC) provides specific rules for their taxability.

Foster care payments are generally non-taxable for federal tax purposes. This exclusion applies to “qualified foster care payments” received from a state, political subdivision, or qualified placement agency. Under IRC Section 131, these payments are not included in gross income, meaning foster parents generally do not report them as taxable income.

“Difficulty of care” payments are another non-taxable category. These are additional amounts for caring for a foster individual with a physical, mental, or emotional handicap requiring specialized care. IRS Notice 2014-7 clarifies that certain state Medicaid Home and Community-Based Services (HCBS) waiver payments can be treated as difficulty of care payments and are excludable from gross income under this section. To qualify, care must be provided in the foster home, and the need for compensation determined by a state.

Foster parents may claim a foster child as a dependent for tax purposes, potentially qualifying for benefits like the Child Tax Credit. To claim a foster child for the Child Tax Credit, criteria include:
Age
Relationship (eligible foster child)
Residency (lived with taxpayer over half the year)
Support (child did not provide over half their own support)
The child must also have a valid Social Security number.

Even though foster care payments are generally non-taxable, maintaining detailed records of expenses is a good practice. While specific tax record-keeping is not required for excludable payments, comprehensive records can aid financial planning or address questions about fund use. Given tax law complexities, consulting a qualified tax professional is recommended for personalized advice on foster care payments and potential tax credits.