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This is just absolutely insane. If they start making people claim the per diem as income they are going to lose a lot of foster parents.
I printed out the Tax year 2009 National Foster Parent Association Federal Tax Benefits and it is so confusing. On one page it states
Form 1099-MISC- Paymets for services performed for a trade or business by people not treated as it's employees. This form is issued to the service provider when $600.00 or more is paid during the calendar year (tax year). It also states that "If a foster parent receives taxable payments the agency issues a form W-2 or 1099-MISC to the foster parent and IRS. The income must be reported on the tax return. Consult a tax professional for the proper reporting on your tax return.
But then when you look on the next page it states "Payments received from a state, political subdivision, or a qualified foster care agency for providing care to qualified foster individuals in your home generally are not included in your income. However, you must include in your income payments received for the care of more than 5 individuals age 19 or older and certain difficulyt of care payments.
So I am really confused???