Chris Dodd: “I am very pleased to rise along with my colleague, Senator Jeffords, in introducing a critically important piece of…”

“I am very pleased to rise along with my colleague, Senator Jeffords, in introducing a critically important piece of legislation that will ensure fair treatment for individuals and families who provide invaluable care to foster children and adults. Presently, foster care providers are permitted to deduct expenditures made while caring for foster individuals if detailed expense records are maintained to support such deductions. However, section 131 of the Internal Revenue Code permits certain foster care providers to exclude, from taxable income, payments they receive to care for foster individuals. Who specifically is available for this exclusion depends upon a complicated analysis of three factors: the age of the individual receiving foster care services, the type of foster care placement agency, and the source of the foster care payments. Section 131 presently permits foster care providers to exclude payments from taxable income only when a state, or one of its political divisions, or a charitable tax exempt placement agency places the individual and makes the foster care payments for children under 19 years of age. However, for adults over the age of 19, section 131 permits foster providers to exclude payments from taxable income only when a State, or one of its divisions, places the individual and provides the foster care payments. Mr. President, it is time that we remove the inequities and needless complexities of the current system.”