Foster Care Tax Credit Act

This bill would create a new refundable $850 tax credit to help foster families. Refundable means you can get the money even if you owe no income tax. The credit starts to shrink for higher earners once income is above $150,000 for single filers, $250,000 for married filing jointly, and $125,000 for married filing separately, and it phases out over the next $17,000 of income.

To qualify, you must have had a qualifying foster child in your home for at least one month during the year; more than 15 days in a month counts as the full month. The child must be under age 17 and a U.S. citizen, national, or resident. You cannot also claim the Child Tax Credit for that same child in the same year. The bill also adds anti-fraud rules: people who previously claimed the credit fraudulently (or recklessly) can be blocked from claiming it again for years afterward.

Key points

• What changes: New refundable $850 tax credit for foster families; phases out at higher incomes .
• Who is affected: Caregivers with a foster child under 17 in the home for at least one month; cannot also claim the Child Tax Credit for that child; includes a “15 days counts as a month” rule.
• Anti-fraud safeguards: Prior bad claims can lead to multi-year bans from the credit.