PRIA Logo™
Take the PRIA Score
HR2438119th CongressWALLET

Foster Care Tax Credit Act

Sponsored By: Representative Houchin

Introduced

Summary

Would create a new $850 Foster Care Tax Credit to help foster parents and add reporting rules for placement agencies. It would also phase out the credit as household income rises, using modified adjusted gross income rules.

Your PRIA Score

Score Hidden

Personalized for You

How does this bill affect your finances?

Sign up for a PRIA Policy Scan to see your personalized alignment score for this bill and every other piece of legislation we track. We analyze your financial profile against policy provisions to show you exactly what matters to your wallet.

Free to start

Bill Overview

Analyzed Economic Effects

4 provisions identified: 3 benefits, 1 costs, 0 mixed.

New $850 tax credit for foster parents

This bill would create a refundable $850 tax credit for foster parents. You would qualify if a foster child under 17, who is a U.S. citizen, national, or resident, lived with you for at least one calendar month in the year. More than 15 straight days in a month would count as the full month. You could not claim this if you claim that child for the Child Tax Credit in the same year. The credit would phase down as your MAGI rises above $250,000 (married filing jointly), $150,000 (single), or $125,000 (married filing separately), using $17,000 as the divisor. This would apply to months after December 31, 2024, in tax years that start after that date.

Stronger checks on foster credit claims

If enacted, the IRS would block the foster care credit after improper claims. A fraud finding would trigger a 10‑year ban on the credit. A finding of reckless or intentional disregard (not fraud) would trigger a 2‑year ban. If the credit was denied under deficiency procedures, you would need to give the IRS the information they require before claiming it again. Tax return preparers would also face due‑diligence penalties if they do not follow the rules when preparing foster credit claims. These changes would apply to months after December 31, 2024, in tax years that start after that date.

Agencies must report foster placements

Authorized agencies and courts would have to file placement reports with the IRS and send foster parents a statement each year. The statement would list the foster parents’ names, addresses, and tax IDs, the child’s name, and the placement dates. Agencies and courts would need to furnish the statement by January 31 for the prior year. Failing to file or furnish would bring existing IRS penalties. These rules would apply to months after December 31, 2024, in tax years that start after that date.

More outreach to help foster families

HHS, with Treasury, would expand outreach and education on tax rules that can help foster families. The bill would allow “such sums as necessary” for this work. This would apply to months after December 31, 2024, in tax years that start after that date.

Free Policy Watch

You just read the policy. Now see what it costs you.

Pick a topic. PRIA runs your household against live legislation and sends you a free personalized readout.

Pick a topic to get started

My TaxesMy HealthMy BudgetMy MoneyMy Freedom
Or tell us something more specific

Sponsors & CoSponsors

Sponsor

Houchin

IN • R

Cosponsors

  • Rep. Johnson, Julie [D-TX-32]

    TX • D

    Sponsored 3/27/2025

  • Rep. Bacon, Don [R-NE-2]

    NE • R

    Sponsored 11/19/2025

  • Rep. Pettersen, Brittany [D-CO-7]

    CO • D

    Sponsored 12/10/2025

  • Rep. Carson, Andre [D-IN-7]

    IN • D

    Sponsored 4/16/2026

Roll Call Votes

No roll call votes available for this bill.

View on Congress.gov
Back to Legislation

Take It Personal

Get Your Personalized Policy View

Take the PRIA Score to see how policy affects your household, then upgrade to PRIA Full Coverage for year-round monitoring.

Already have an account? Sign in