Foster Parent Tax Deduction FAQs
Beginning with the 2022 tax year, individuals are allowed a deduction for expenses directly related to providing care as a foster parent in the state of Missouri. The deduction is subtracted from Missouri adjusted gross income to determine Missouri taxable income, and is reported on the Form MO-1040 accompanied by Form 5870, Foster Care Affidavit.
Qualified taxpayers must meet the definition of “foster parent” provided in the Missouri Revised Statutes, Section 210.566.
Qualifying foster parents will be determined by the Department of Social Services and provided a letter stating the qualifying number of days the foster parent provided care in their home.
The foster parent deduction is limited to the amount of expenses or
- $5,000 for those with the filing status of Married Filing Combined, Head of Household, Single, and Qualifying Widow(er), or
- $2,500 for those with the filing status of Married Filing Separate, whichever is less.
If care is provided for at least six months (183 days), you are eligible for the full amount of the deduction, referenced above. If care is provided for less than six months, the amount of the deduction is reduced on a pro rata basis.
The number of days is calculated based on a cumulative number of days a child(ren) is placed in the home within the year. The calculation of days is not required to be consecutive dates.
In the examples below, the assumption is made that the foster parents provided care to a foster child in their home for 6 months (183 days) or more.
- Example: A married couple files a combined return. One spouse incurs $6,000 of foster care expenses, while the other spouse incurs $5,500 of expenses. Both provide care as foster parents for more than six months out of the year. On their Missouri return, their deduction is limited to $5,000
- Example: A married couple each file a separate return. One spouse incurs $6,000 of foster care expenses, and the other spouse incurs $5,500 of expenses. On their separate returns, each spouse is limited to a deduction of $2,500.
- Example: A married couple each file a separate return. Spouse A incurs $4,000 of foster care expenses, and spouse B incurs $1,500 of expenses. On their separate returns, spouse A is allowed a $2,500 deduction, while spouse B is limited to a deduction of $1,500.
If care is provided for less than six months (183 days) out of the year, the maximum deduction amount is reduced on a pro rata basis. The deduction amount is computed by the number of days care is provided divided by 183. The percentage is then multiplied by the maximum deduction amount allowed based on your filing status. Form 5870, Foster Care Affidavit, is used to calculate the pro rata amount.
- Example: A single foster parent provides foster care for 20 days in August, 20 days in September, and 20 days in December. The total number of days a child(ren) is placed in the home is divided by the number of days in six months (183). As a result, a deduction of 33 % of the maximum deduction will be allowed. (Calculation Example: 60 / 183 = .33 or 33%)
- The maximum deduction is $5,000 multiplied by 33 percent, or $1,650. If the foster care expenses are less than the prorated maximum amount ($1,650), the allowable deduction is for the expenses incurred.
Yes. However, the deduction maximums apply, regardless of the number of children placed in the home.
See questions regarding deduction maximums:
- How much can be deducted?
- How much can be deducted if care is provided for less than six months out of the year?
For purposes of counting the six months out of the year, can more than one child be counted if they are not being provided care at the same time?
Yes. For purposes of computing the maximum deduction each calendar date is counted one time, regardless of how many children overlap in the home on the same date and the maximum deduction limitations apply.
Example: A single individual provides foster care for one child January 1 through April 30 (totals four months) and one additional child is fostered, in the same home, from March 1 through June 30 (two additional months) totaling six months.
The deduction is for expenses incurred directly for the child in foster care. These include, but are not limited to food, clothing, medical appointments, and medication for asthma or insulin directly for the foster child.
Expenses not qualifying for the deduction include expenses such as utility expenses, the purchase of a television or computer used by other members of the household, general transportation and food expenses for the household, and expenses paid for through public assistance or a charity program.
The Department of Social Services will issue a letter (Form CD-310) identifying the number of days a foster child(ren) were in the home.
If you still have questions, please check out other Individual Income Tax FAQs.