Current through Register Vol. 49, No. 18, September 16, 2024
PURPOSE: This rule interprets and implements the
foster parent tax deduction provided in section
143.1170, RSMo.
(1) The maximum deduction allowed by section
143.1170, RSMo, is five thousand
dollars ($5,000) per tax return, regardless of filing status, except that
individuals with a filing status of married filing separately are allowed a
maximum of only two thousand five hundred dollars ($2,500) per individual
taxpayer.
(A) Example: For the entire year of
2023 (365 days), John and Jane Smith both provided care to a child as foster
parents as defined under section
210.566, RSMo. John and Jane
Smith file a Missouri income tax return using the filing status of married
filing combined. John has expenses incurred directly in providing care as a
foster parent in the amount of $6,000, and Jane has incurred such expenses in
the amount of $5,500. On their combined Missouri income tax return for 2023,
John and Jane may only take a deduction under section
143.1170, RSMo, of
$5,000.
(B) Example: Same as the
above, except that John and Jane Smith use the filing status of married filing
separately. On his 2023 Missouri income tax return, John may take a deduction
under section 143.1170, RSMo, of only $2,500,
and Jane may take a deduction under section
143.1170, RSMo, of only
$2,500.
(C) Example: Same as the
above, with John and Jane Smith using the filing status of married filing
separately, except that in 2023 John has expenses incurred directly in
providing care as a foster parent in the amount of $4,000 and Jane has only
$1,500 in such expenses. On his 2023 Missouri income tax return, John may only
take a deduction under section
143.1170, RSMo, of $2,500. On
her 2023 Missouri income tax return, Jane may only take a deduction under
section 143.1170, RSMo, of
$1,500.
(2) The maximum
deduction limit to be allowed on a tax return is calculated as follows. The
cumulative number of full days during which foster care was provided shall be
totaled, and this total shall be divided by one hundred eighty-three (183)
days. If the result equals or exceeds one (1), the maximum deduction can be
allowed. If the result is less than one (1), round the result to the nearest
two decimal places and multiply it by five thousand dollars ($5,000) (or two
thousand five hundred dollars ($2,500) if married filing separately) to arrive
at the maximum deduction that can be allowed on the return.
(A) Example: During the year 2023, Jane
Smith, whose filing status is single, provides care as a foster parent, as
defined under section
210.566, RSMo, to a child for 20
days in August, 20 days in September, and 20 days in December. Jane Smith
totals these days to arrive at the sum of 60 days during which she provided
foster care. Jane Smith then divides these 60 days by 183 days, to arrive at a
result rounded to 0.33. This result is then multiplied by $5,000 to arrive at
$1,650, the maximum deduction under section
143.1170, RSMo, that can be
allowed on her tax return. Jane Smith directly incurred $700 in providing care
as a foster parent during 2023. Therefore, Jane Smith may deduct that $700 on
her 2023 tax return under section
143.1170, RSMo.
(B) Example: Same as the above, except that
Jane Smith directly incurred $8,000 in providing care as a foster parent during
2023. Because the maximum deduction that can be allowed on her return is
$1,650, she may only deduct $1,650 on her 2023 tax return for these expenses
under section 143.1170,
RSMo.
(3) A taxpayer
desiring to claim the foster care deduction shall file an affidavit with the
taxpayer's income tax return affirming that the taxpayer is a foster parent and
is entitled to the deduction in the amount claimed on the return. This
affidavit may be in a form provided by the Department of Revenue. In addition,
if a taxpayer receives a letter from the Department of Social Services stating
the number of days during the year in which the taxpayer has provided care as a
foster parent, the taxpayer shall attach a copy of that letter to the income
tax return for the corresponding year in which this deduction is
claimed.
(4) Expenses incurred
directly by the taxpayer in providing care as a foster parent include but are
not limited to the following examples, to the extent the below expenses were
incurred directly by the taxpayer:
(A) Food
purchased directly for the foster child; and
(B) Clothing purchased directly for the
foster child.
(5) The
following are examples of expenses that are not incurred directly by the
taxpayer in providing care as a foster parent:
(A) The increase in household utility
expenses (e.g., electricity expense) attributable to the provision of foster
care;
(B) The purchase of a
television or computer used by multiple members of the household in addition to
the foster child;
(C) General
transportation or food expense for the household; and
(D) Expenses paid for directly through a
public assistance program or charitable program.
