Foster Care Tax Credit Act

HR 2438, the Foster Care Tax Credit Act, creates a new $850 tax credit for foster parents who care for eligible children. The credit applies to taxpayers with a qualifying foster child (under 17, a U.S. citizen/resident) placed with them for at least one month during the tax year, who aren't already claiming the Child Tax Credit for that child. The credit phases out for higher-income households, with thresholds of $250,000 for joint filers and $150,000 for single filers. The bill also requires foster care placement agencies to report foster child placement information to the IRS and mandates a study on emergency foster care placements. The credit would take effect for taxable years beginning after December 31, 2024.