Reinbursement- Is this legal??

[ripvanwinkle]

My sister works for a company that works with the county to take care of "at risk" kids. Shes not a foster parent but I think a "proctor" whatever that is. She does respite care for other foster parents that need a break. Weekend getaway, family emergency, vacation etc. She has the kids for maybe 3-4 days, sometime for a week. I call it babysitting.

She said she gets paid a "reimbursement" of $50 a day for each kid. She takes them to school, shopping, movies, doctor appt, meals. She fills out and sends in their forms on their behavior, what they did etc. She does not get any end of year statement. The money comes from the state.

Does this sound legal?

[oped]

I don't know. I found this, from a 2003 link which is apparently still active on the IRS website

CONCLUSIONS

(1) The payments made to respite care providers are not excludable from gross income

under § 131 because they do not meet the requirements of either § 131(b)(1)(B) or

§131(b)(2).



BUT... I also found this from 2014


Qualified foster care payments

Section 131(a) excludes qualified foster care payments from the gross income of a foster care provider.



Section 131(b)(1) defines a qualified foster care payment, in part, as any payment under a foster care program of a state or a political subdivision that is either (1) paid to the foster care provider for caring for a qualified foster individual in the foster care provider’s home, or (2) a difficulty of care payment.

So I'm really not sure? But it seems possible. 

I'm torn because I always considered if I took in foster care kids that the money was to be spent on them, so not really income.  For instance, if it is income, then she should also be able to expense those movie tickets and food and gas, etc. 

[Tennesseer]

Jan 22, 2021 0:26:41 GMT -5 ripvanwinkle said:

My sister works for a company that works with the county to take care of "at risk" kids. Shes not a foster parent but I think a "proctor" whatever that is. She does respite care for other foster parents that need a break. Weekend getaway, family emergency, vacation etc. She has the kids for maybe 3-4 days, sometime for a week. I call it babysitting.

She said she gets paid a "reimbursement" of $50 a day for each kid. She takes them to school, shopping, movies, doctor appt, meals. She fills out and sends in their forms on their behavior, what they did etc. She does not get any end of year statement. The money comes from the state.

Does this sound legal?

Spoke with my brother and his wife. They used to take care of foster kids. Nothing long term just until a permanent home could be hopefully found.

What your sister is doing as a proctor is really no different than a foster parent-just very short term.

My brother said they received so much money for each day of care. As the money was to be spent directly on the children they never had to list the reimbursement as income. They same would apply to your sister's care.

It is the agency which has to report where the money is going for the care of the children. That money for them would most likely be not reported on tax forms too.

So what your sister is doing is legal. All the money is spent on the children in her short care. Your sister is not earning a living off of her care of the kids.

[ripvanwinkle]

Thanks for the inputs. I never heard of this reimbursement thing before. She hasn't filed any taxes for over 20 yrs.