Adult Family Home ( AFH) Business taxes
Foster care providers caring for adult individuals who have a physical, mental, or emotional handicap can EXCLUDE SOME of their gross income received from the state compensation on behalf of these individuals. IRS exempts income paid through a state Medicare program to AFH for up to 5 adults in a family home.(Reference IRS NOTICE 2014-7 Medicaid waiver ). These payments are referred to as difficulty of care payments excludable from gross income under § 131 of the Internal Revenue Code.
Note: Section 131(b)(1) clearly states that these adult individuals MUST be in the foster care provider’s home (under the same roof).
Please visit this website for additional information about the Adult Family Home Business :