What should you expect?
The costs associated with adoption vary. The typical costs include:
- Agency Fees
- Legal Fees
- Birth parent expenses such as counseling, medical expenses and court costs
There are a number of financial resources you may be able to utilize to help with the expenses.
Federal Tax Credit
In 1997, the Federal Adoption Tax Credit went into effect. Congress has extended the tax credit through December 31, 2010. Renewal by Congress is in progress. Currently, the Adoption Tax Credit allows a maximum credit of $12,500 per child. The credit is available for special needs and non-special needs adoptions. The credit phases out for those earning more than $182,180 (single) or $222,180 (couples).
A tax preparer or personal accountant can help a family estimate their personal benefit.
For additional information contact the Internal Revenue Service at or call 1.800.829.3676 and request information on the Adoption Tax Credit and Tax Exclusion from publication 968.
State Tax Credit
Contact your states adoption specialist to inquire whether or not your state provides a tax credit if you adopt a child from a public adoption agency.
In most cases the United States military will reimburse up to $2,000 per child for related one-time adoption costs. This reimbursement is for active-duty personnel and the reimbursement is available whether you are adopting from within the United States or internationally. The adoption must take place through a state adoption agency or a private non-profit agency. The $2,000 reimbursement usually is made once the adoption is finalized.
Although this is not an adoption specific benefit, as adoptive parents you qualify for taking the same dependency exemption on your income taxes as other parents. You are qualified for the dependency exemption even if the adoption has not yet been finalized.
Some life insurance policies, banks and credit unions offer loans for those seeking to adopt.
There may be a private grant opportunity that you may qualify for when pursing adoption. The grant monies may be available for families that are more socio-economically challenged or to encourage families to adopt special needs children. Contact the National Adoption Foundation at 203.791.3811 for more information.
For more information, please contact us at firstname.lastname@example.org or 314.968.2350 x230.