"My client qualifies for this because his two clients are full time residents at his home."

Yes, this part qualifies as difficulty of care. It's "their" home.

"The question is with the supplemental payments for taking his clients to the museum, parks, and other activities. These payments were reported on a 1099 separately from his other payments."

Because that agency did it properly. It's not Difficulty of Care, if it isn't part of the care recipient's plan of care and it's not personal care. It's more like Attendant care, and as you pointed out, it's part of day care. It's socializing and worthy, but not qualified.

Did you read the link I provided, Q11? We've seen that same sort of issue here, where an agency sends the attendant a full W2, the attendant is an employee, but some of their wages qualify as plan of care-related difficulty of care and some is employment wages. It would be broken out.

It seems your taxpayer got everything already divided into qualified and not qualified reporting.

"Those payments could be coming from some other government-funded program."

Exactly. Example: the client might have a Veteran's benefit income of some sort that is incorporated into their care plan. The State would give them a budget in their care plan to hire help directly, and that would cover extra-curricular activities (nonmedical and beyond basic personal care). If that is managed through a State program, it is reported like this topic.