Special rule for difficulty of care payments excluded from gross income
(A) In general
(A)In general#
For purposes of paragraph (1)(B), in the case of an individual who for a taxable year excludes from gross income under section 131 a qualified foster care payment which is a difficulty of care payment, the participant’s compensation, or earned income, as the case may be, shall be increased by the amount so excluded.
(B)Contributions allocable to difficulty of care payments treated as after-tax#
Any contribution by the participant which is allowable due to such increase—
(i) shall be treated for purposes of this title as investment in the contract, and
(ii) shall not cause a plan (and any arrangement which is part of such plan) to be treated as failing to meet any requirements of this chapter solely by reason of allowing any such contributions.
(B)(i)#
shall be treated for purposes of this title as investment in the contract, and
(B)(ii)#
shall not cause a plan (and any arrangement which is part of such plan) to be treated as failing to meet any requirements of this chapter solely by reason of allowing any such contributions.