26 U.S.C. § 131
Section 131 · Certain foster care payments
Current version, with additions and removals from the October 22, 1986 version.
Gross income shall not include amounts received by a foster care provider during the taxable year as qualified foster care payments.
Gross income shall not include amounts received by a foster care provider during the taxable year as qualified foster care payments.
For purposes of this section—
For purposes of this section—
(1) In general
(1) In general
(A) which is paid by a State or political subdivision thereof or by a placement agency which is described in section 501(c)(3) and exempt from tax under section 501(a), and
(A) which is paid by—
(i) a State or political subdivision thereof, or
(ii) a qualified foster care placement agency, and
(B) which is—
(B) which is—
(i) paid to the foster care provider for caring for a qualified foster individual in the foster care provider's home, or
(i) paid to the foster care provider for caring for a qualified foster individual in the foster care provider's home, or
(ii) a difficulty of care payment.
(ii) a difficulty of care payment.
(2) Qualified foster individual
(2) Qualified foster individual
The term “qualified foster individual” means any individual who is living in a foster family home in which such individual was placed by—
The term “qualified foster individual” means any individual who is living in a foster family home in which such individual was placed by—
(A) an agency of a State or political subdivision thereof, or
(A) an agency of a State or political subdivision thereof, or
(B) in the case of an individual who has not attained age 19, an organization which is licensed by a State (or political subdivision thereof) as a placement agency and which is described in section 501(c)(3) and exempt from tax under section 501(a).
(B) a qualified foster care placement agency.
(3) Qualified foster care placement agency
The term “qualified foster care placement agency” means any placement agency which is licensed or certified by—
(A) a State or political subdivision thereof, or
(B) an entity designated by a State or political subdivision thereof,
for the foster care program of such State or political subdivision to make foster care payments to providers of foster care.
In the case of any foster home in which there is a qualified foster care individual who has attained age 19, foster care payments (other than difficulty of care payments) for any period to which such payments relate shall not be excludable from gross income under subsection (a) to the extent such payments are made for more than 5 such qualified foster individuals.
In the case of any foster home in which there is a qualified foster care individual who has attained age 19, foster care payments (other than difficulty of care payments) for any period to which such payments relate shall not be excludable from gross income under subsection (a) to the extent such payments are made for more than 5 such qualified foster individuals.
For purposes of this section—
For purposes of this section—
(1) Difficulty of care payments
(1) Difficulty of care payments
The term “difficulty of care payments” means payments to individuals which are not described in subsection (b)(1)(B)(i), and which—
The term “difficulty of care payments” means payments to individuals which are not described in subsection (b)(1)(B)(i), and which—
(A) are compensation for providing the additional care of a qualified foster individual which is—
(A) are compensation for providing the additional care of a qualified foster individual which is—
(i) required by reason of a physical, mental, or emotional handicap of such individual with respect to which the State has determined that there is a need for additional compensation, and
(i) required by reason of a physical, mental, or emotional handicap of such individual with respect to which the State has determined that there is a need for additional compensation, and
(ii) provided in the home of the foster care provider, and
(ii) provided in the home of the foster care provider, and
(B) are designated by the payor as compensation described in subparagraph (A).
(B) are designated by the payor as compensation described in subparagraph (A).
(2) Limitation based on number of individuals
(2) Limitation based on number of individuals
In the case of any foster home, difficulty of care payments for any period to which such payments relate shall not be excludable from gross income under subsection (a) to the extent such payments are made for more than—
In the case of any foster home, difficulty of care payments for any period to which such payments relate shall not be excludable from gross income under subsection (a) to the extent such payments are made for more than—
(A) 10 qualified foster individuals who have not attained age 19, and
(A) 10 qualified foster individuals who have not attained age 19, and
(B) 5 qualified foster individuals not described in subparagraph (A).
(B) 5 qualified foster individuals not described in subparagraph (A).