With the increasing use of siloxane polymers as optical waveguide material, there is a need to understand and thus to reduce the stress-induced birefringence in siloxane polymer due to thermal processing and material property mismatch. In this letter, stress-optical coefficients of a siloxane polymer material are experimentally determined by measuring the refractive indices of the uncured and cured siloxane polymer material in two orthogonal directions. Employing such coefficients and temperature- and direction-dependent material properties, a numerical modeling method is presented to determine the stress-induced birefringence in an optical waveguide system. In the case study that is presented in this work, it is seen that the coefficient of thermal expansion of the planarization layer has the maximum effect on the birefringence, and it is possible to reduce the stress-induced birefringence by reducing the property mismatch between the planarization layer and the core layer. The outlined methodology is generic in nature and can be applied to different waveguide geometries, planarization materials, and substrate/board materials to assess how stress-induced birefringence can be minimized for a given polymer core material.