Foster parents are paid a monthly stipend by the state or county child welfare agency, or by a private agency the state contracts with, to reimburse the day-to-day costs of caring for a child placed in their home. The money is a reimbursement, not wages, and qualified foster care payments are excluded from gross income under federal tax law, so you generally owe no federal income tax on what you receive for a child’s care. How much arrives each month depends on your state, the child’s age, and the level of care the child needs.
How the Monthly Payment Works
Most states set a daily rate and pay the total once a month by check or direct deposit. If a child moves in or out partway through the month, the payment is pro-rated by the number of nights the child actually stayed. The check comes from the state or county child welfare agency, or from a private foster care agency working under contract with the state.
The money is earmarked for the child. Agencies expect it to be spent on the child’s food, clothing, shelter, supervision, school supplies, personal items, and reasonable travel for court-ordered visits with biological parents, rather than treated as household income. It is not meant to cover every expense a foster child may generate, which is why states layer additional allowances and reimbursements on top of the base stipend.
How Much Foster Parents Get Paid
Amounts vary sharply by state. Monthly stipends for basic foster care can run from under $200 in some states to over $1,400 in others, reflecting local cost of living, state budget choices, and how each state structures its program. Two factors then move the number within a state: the child’s age and the child’s level of care.
Age-Based Rates
Older children come with higher stipends because they cost more to feed, clothe, and transport. Most states use at least three age tiers, commonly infants through age five, school-age six to twelve, and teenagers thirteen and older. The gap between the youngest tier and the oldest can be several hundred dollars a month.
Level-of-Care Rates
Children with serious medical, emotional, behavioral, or developmental needs are placed at higher “levels of care” that pay substantially more. A basic placement might pay a daily rate in the mid-to-upper $20s. A therapeutic or treatment-level placement can pay $90 to $140 per day or more, reflecting the added training, supervision, therapies, and equipment those placements require.
Kinship and Relative Caregivers
If you take in a relative’s child, what you receive depends heavily on whether you become a licensed foster parent. Licensed kinship caregivers get the same stipend any other licensed foster home would receive for the same child. Unlicensed relatives caring for a child through the child welfare system typically receive much less, sometimes half or less of the licensed rate.
Unlicensed relatives may also qualify for a Temporary Assistance for Needy Families child-only grant. These grants look only at the child’s income, not the caregiver’s, so most children qualify. The amounts are modest, averaging roughly $8 per day for one child nationally, but they help family members who stepped in on short notice and haven’t finished licensing.
What Comes With the Stipend
The monthly check is one piece of the financial picture. Several other supports affect what you actually end up spending out of pocket, though availability and rules vary by state and agency.
Medicaid for the Child
Children receiving Title IV-E foster care assistance are automatically eligible for Medicaid, which covers doctor visits, dental care, prescriptions, and mental health services.1Medicaid and CHIP Payment and Access Commission. Children in the Child Welfare System Children who don’t meet Title IV-E criteria usually still qualify through other pathways. This matters financially because foster children often need more medical and behavioral health care than other children their age, and none of that comes out of the stipend.
Clothing Allowances
Many states pay a separate clothing allowance, often as a one-time payment when a child first arrives with few belongings, and sometimes as a semiannual or annual payment for seasonal wardrobe needs. Amounts are modest and scale with the child’s age.
School and Extracurricular Costs
Foster children generally qualify for free or reduced-price school meals. Beyond that, agencies often reimburse school supplies, fees, tutoring, and transportation to keep a child in their original school after a placement change. Some states also cover sports equipment, music lessons, and summer camp fees, usually with prior approval and receipts.
WIC for Young Children
Foster children who are infants or under age five may be eligible for the Special Supplemental Nutrition Program for Women, Infants, and Children. Federal regulations require state WIC agencies to plan for serving children in foster care, and children already on Medicaid are automatically income-eligible.2eCFR. Part 246 Special Supplemental Nutrition Program for Women, Infants and Children
Respite Care
Most states will pay for a trained substitute caregiver for short periods, sometimes up to several weeks per year. Some states pay the respite provider directly; others reimburse the foster parent.
Mileage Reimbursement
Foster parents regularly drive to medical appointments, therapy, court hearings, and family visits. Many agencies reimburse the mileage, often benchmarked to the IRS standard mileage rate. For 2026, the IRS medical-purpose rate is 20.5 cents per mile and the charitable-purpose rate is 14 cents per mile.3Internal Revenue Service. IRS Sets 2026 Business Standard Mileage Rate at 72.5 Cents Per Mile, Up 2.5 Cents Your agency’s rate may differ, and some require a travel log submitted within 30 days.
Liability Coverage
Federal policy recognizes that foster parent liability insurance should cover damage to the foster home and liability for harm a child may cause to others.4Child Welfare Policy Manual. Section 7.4 Policy Questions and Answers States handle this differently. Some fold an insurance component into the stipend, some carry a group policy, and some treat foster parents as state agents for liability purposes. Coverage gaps are common, so ask your agency exactly what is and isn’t covered before a problem comes up.
Taxes on Foster Care Payments
Qualified foster care payments are excluded from gross income under Section 131 of the Internal Revenue Code. That covers the basic maintenance stipend and “difficulty of care” payments, which compensate for the extra demands of caring for a child with physical, mental, or emotional disabilities.5Office of the Law Revision Counsel. 26 USC 131 – Certain Foster Care Payments You do not report these payments as income on your federal return.
To qualify, the payment must come from a state, local government, or qualified foster care placement agency, for a child placed in your home. There are caps for larger foster homes: regular foster care payments are excludable for up to five qualified foster individuals age 19 or older; for difficulty of care payments, the cap is ten individuals under 19 and five individuals 19 or older.5Office of the Law Revision Counsel. 26 USC 131 – Certain Foster Care Payments Most families caring for one to three children will never hit these limits.
Tax Credits
Even though the stipend is tax-free, a foster child placed in your home by a state agency or court order can count as a qualifying child for tax credits. The Child Tax Credit is currently worth up to $2,200 per qualifying child, and the Earned Income Tax Credit can reach $8,046 for families with three or more qualifying children.6Internal Revenue Service. Child Tax Credit7Internal Revenue Service. Earned Income and Earned Income Tax Credit (EITC) Tables
The child generally must live in your home for more than half the tax year, meet the age requirements (under 19, or under 24 if a full-time student), and not provide more than half of their own support.8Internal Revenue Service. Dependents For the EITC specifically, the child must be placed by a state or local government agency, an Indian tribal government, a tax-exempt licensed organization, or a court order.9Internal Revenue Service. Qualifying Child Rules A child who arrives mid-year and stays through December may not meet the half-year residency test until the following tax year, which catches some foster parents off guard.
Deducting Unreimbursed Expenses
Money you spend on a foster child beyond what the stipend and agency cover may be deductible as a charitable contribution if a qualified organization selected the child for placement, you have no profit motive, and the expenses were for feeding, clothing, or otherwise caring for the child.10Internal Revenue Service. Publication 526 – Charitable Contributions The deduction is subject to a percentage-of-income limit, typically 30% of adjusted gross income when the placing agency is a private nonprofit. If you took in the child primarily because you wanted to adopt, the IRS says those expenses do not qualify as charitable contributions. The deduction only helps if you itemize, so its value depends on whether your total itemized deductions beat the standard deduction.