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Is foster care income taxable?

Is foster care income taxable?

Generally, foster care payments are not subject to federal or Michigan income tax. However, in a few situations when you receive a W-2 or 1099, you will be subject to federal tax. Those payments would be subject to Michigan tax to the extent that they are included in your adjusted gross income.

Note: Any nontaxable foster care payments must be included in total household resources.