How Much Do Foster Parents Get Paid in NC: Rates, Benefits, Taxes

Foster parents in North Carolina get paid between $702 and $810 per child each month, with the exact amount set by the child’s age and additional payments available when a child has medical, emotional, or behavioral needs. The money is a reimbursement for the child’s living costs rather than a wage, and it comes with Medicaid coverage for the child, a separate clothing allowance, and federal tax-exempt status on the payments themselves.¹

Monthly Board Rates by Age

North Carolina uses one statewide rate schedule under N.C. General Statute 108A-49.1, so the amount does not change from county to county. For the 2025–2026 fiscal year, the maximum monthly rates are:¹

Birth through age 5: $702 per month
Ages 6 through 12: $742 per month
Ages 13 through 20: $810 per month

These figures took effect on July 1, 2023 under Session Law 2023-14 and remain the current rates.²

Higher Payments for Children With Special Needs

A standard board rate is often not enough for a child who needs specialized care. North Carolina layers additional payments on top of the base rate in several ways.

Therapeutic Foster Care

Children who need a more structured, supervised environment can be placed in therapeutic foster care, which requires extra training for the caregiver and closer oversight from the supervising agency. Two of the state’s four Medicaid residential treatment levels are delivered in family homes:³

Level 1, a low-to-moderate structured family setting: $63.26 daily treatment service rate
Level 2, a moderate-to-highly structured family setting: $112.64 daily treatment service rate

Those daily rates are Medicaid reimbursements for the therapeutic services attached to the placement.⁴ Foster parents in a therapeutic placement still receive the standard board rate plus difficulty of care compensation, and the supervising agency sets that added amount based on the child’s individual needs. Levels 3 and 4 are not family-home placements.

Vendor Payments for Documented Needs

When a licensed foster child has documented special needs, the county can make vendor payments funded by the Social Services Block Grant to cover costs the standard board rate does not. These are capped at $150 per month and require a vendor agreement between the county and the foster parent describing the child’s needs and any extra training you have to complete.⁵

HIV-Related Rates

Supplemental board payments for children prenatally exposed to HIV or living with HIV are set separately and are considerably higher:¹

Indeterminate HIV status: $800 per month
Confirmed HIV infection, no symptoms: $1,000 per month
Confirmed HIV infection with symptoms: $1,200 per month
Terminal illness with complex care needs: $1,600 per month

What the Payment Is Meant to Cover

The monthly rate reimburses you for the child’s day-to-day expenses. Under state foster care funding rules, that includes food, the child’s share of housing and utilities, and clothing, plus personal items such as school supplies, haircuts, and recreation, routine transportation to school and appointments, and the cost of daily supervision.⁵

The payment is not designed to produce income. If what you actually spend on the child exceeds the board rate, you may be able to take the excess as a charitable contribution on your itemized federal tax return.

Other Benefits That Reduce Your Costs

Medicaid

Every child in North Carolina foster care qualifies for full Medicaid, which covers medical, dental, and mental health services.⁶ In 2025 the state moved children in and formerly in the child welfare system onto a single statewide plan, the Children and Families Specialty Plan, which combines physical and behavioral health services.⁷

Clothing Allowance

A clothing allowance is paid twice a year, separately from the monthly board rate. Counties typically pay $200 per child per period, helping cover seasonal changes and growth.⁸

WIC and Child Care Subsidy

Children under five may qualify for the Women, Infants, and Children (WIC) nutrition program.⁹ If you work outside the home or need care to support the child’s case plan, the state’s child care subsidy program can help pay for daycare and after-school care.¹⁰

Respite Care

Foster parent agreements may include respite care payments to compensate a substitute caregiver when you need a short break. This is not automatic in every placement; both availability and the amount depend on your agreement with the supervising agency and the county’s policies.¹¹

Liability Insurance

Licensed foster parents are covered by a foster care liability policy with a minimum of $100,000 per occurrence for bodily injury or property damage, which protects you if a foster child is injured in your care or a third party makes a claim tied to the placement.¹²

Taxes on Foster Care Payments

Foster care maintenance payments are excluded from gross income under Section 131 of the Internal Revenue Code, so you do not owe federal income tax on the standard board rate or on difficulty of care payments. The care must be provided in your own home, and the payments must come from a state, local government, or licensed placement agency.¹³

Difficulty of care payments are excluded on the same basis, as long as the state determined the child needed the additional compensation and the payor designated the payment for that purpose.¹⁴ The exclusion covers up to 10 foster children under 19 and up to 5 who are 19 or older.¹⁵ North Carolina generally follows the federal code for individual income tax, so the payments are typically excluded from state tax as well. Keep your payment records regardless.

Claiming a Foster Child as a Dependent

If a foster child lives with you for more than half the tax year, you may be able to claim them as a qualifying child for credits like the Earned Income Tax Credit. The placement must have come from a state or local agency, a tribal government, a tax-exempt licensed organization, or a court order, and the child needs a valid Social Security number and cannot have filed a joint return with a spouse.¹⁶

When and How You Get Paid

Payments are made in arrears. The county Department of Social Services or the private supervising agency tracks placement days during the month, then pays you the following month, most often by direct deposit. You may need to submit daily logs or attendance records to verify the child was in your home during the billing period.¹⁷ If a child arrives partway through a month, the payment is prorated for the days in your care.

Payments That Continue After Age 18

North Carolina lets foster care continue past 18 through the Foster Care 18 to 21 program. A young adult who was in foster care on their 18th birthday can keep receiving financial assistance and support if they meet at least one of the following:¹⁸

Enrolled in secondary or postsecondary education
Enrolled in a vocational education program
In a program that promotes employment or removes barriers to it
Employed at least 80 hours per month
Unable to meet the education or employment requirements due to a medical condition or disability

Federal funding through the Chafee program supports additional transitional services (financial help, housing support, counseling, employment services) for youth who were in foster care at 14 or older.¹⁹ Foster youth attending college or vocational training can receive up to $5,000 per year through the Education and Training Voucher program, administered in North Carolina as NC REACH; the vouchers are available until age 26 with a five-year total participation cap.²⁰

1
North Carolina General Assembly. North Carolina Code 108A-49.1 – Foster Care and Adoption Assistance Payment Rates
2
NCDHHS. County Budget Estimates for the 2025-2026 Fiscal Year
3
NC Medicaid. Residential Treatment Services Clinical Coverage Policy 8D-2
4
NCDHHS. Child Welfare Services Rate Schedule Fiscal Year 2024-2025
5
NCDHHS. Foster Care Funding Appendix 3.5
6
NCDHHS. Group Benefits Basic Medicaid Eligibility Requirements
7
NCTracks. Children and Families Specialty Plan Begins Today
8
Carteret County. Frequently Asked Questions – Social Services
9
NCDHHS. Apply for WIC
10
NCDHHS. Child Care Subsidy (Help Paying for Child Care)
11
NC Office of Administrative Hearings. 10A NCAC 70 – Children’s Services Rules
12
NCRB. Foster Care Liability Rate Filing
13
Office of the Law Revision Counsel. 26 USC 131 – Certain Foster Care Payments
14
Internal Revenue Service. Notice 2014-7
15
OLRC. href=”https://uscode.house.gov/view.xhtml?req=%28title:26%20section:131%20edition:prelim%29″ target=”_blank” rel=”noopener”>26 USC 131 – Certain Foster Care Payments
16
Internal Revenue Service. Qualifying Child Rules
17
NCDHHS. County Placement Payment System Appendix
18
NCDHHS. Independent Living Services for Transitional Age Youth
19
Office of the Law Revision Counsel. 42 USC 677 – John H. Chafee Foster Care Program for Successful Transition to Adulthood
20
NCDHHS. North Carolina Post-Secondary Education Assistance Program