How will you meet the adoption expenses incurred along the way? Make use of the credits, benefits, subsidies, and other resources listed below.
Adoption can cost $25,000 to $35,000 or even more, but credits, reimbursements, and other benefits can make your adoption affordable. Here are some of them:
Federal Adoption Expense Tax Credit
For tax year 2014, the federal tax credit to help families cover adoption expenses currently stands at $13,190 per adoption (subject to income limitations). Taxpayers with a modified adjusted gross income (MAGI) on $197,880 or less can claim the full amount. The credit phases out completely at a MAGI of $237,880.
State Tax Credits
Several states have tax credits to help families cover adoption expenses, sometimes restricted to those adopting from that state’s public child welfare system. Contact your state adoption unit for more information.
Children with special needs may qualify for a subsidy to help parents pay for ongoing treatments. Learn more about adoption subsidies.
Nonrecurring Adoption Expense Reimbursement
Families who adopt from the public system may be eligible for reimbursement of adoption expenses (adoption-related), such as homestudy, travel, and attorney costs. Learn about adoption subsidies in your state.
Active-duty personnel may be reimbursed up to $2,000 per child or up to $5,000 a year for qualifying expenses, whether adopting an infant, a waiting child, or a child from abroad.
A guide published by AdoptUSKids, Wherever My Family Is: That’s Home! Adoption Services for Military Families, explains how to minimize obstacles to adoption, with information about the homestudy process and post-adoption services.
Some employers offer adoption benefits, including expense reimbursement and paid leave. Read: “How to Lobby Your Employer for Adoption Benefits.” Find more help in lobbying for these benefits from the Dave Thomas Foundation for Adoption’s Adoption-Friendly Workplace initiative.
Grants and Loans
Some adoption agencies and organizations offer adoption grants and/or low-cost loans to help families cover adoption expenses. Search the adoption agency directory to find contact information for agencies that work in your state. For instance, the Gift of Adoption Fund, and A Child Waits, offers grants and loans for families adopting internationally. Helpusadopt.org, a startup financial assistance grant program, awards grants twice per year to prospective adopters who face significant financial obstacles.
Look into cash advances from credit cards, second mortgages, home equity loans, and special adoption loans. Consider borrowing from your life insurance policy, 401(k), or pension plan. Perhaps you can tap friends and relatives. If you feel uncomfortable asking them directly, register with www.gotchagiftregistry.com, an online adoption gift registry service where friends and family can help defray adoption expenses. Maybe you can take a second job until your child comes, or identify a birth mother who already has medical insurance.
*Read tips from parents about the ways they financed adoption.
Leave no stone unturned.