Monday, March 16, 2015

Making Adoption Affordable 2015

Making Adoption Affordable
Federal Tax Credit
There is help available.  The federal Adoption Tax Credit provides up to $13,400 for qualifying expenses paid to adopt an eligible child in 2015.  The credit is indexed for inflation and will increase annually.  Eligible expenses include adoption fees, court costs, attorney fees, traveling expenses (including amounts spent for meals and lodging) and other expenses directly related to your adoption.  There is an income limit for this credit. See www.irs.gov, for the forms and additional information.                      

Corporate Matching Gifts
Further, many large employers offer adoption assistance.  See htttp://benefits.adoption.com/ for a list of employers.  Those payments may qualify for exclusion from your income for tax purposes in addition to the federal tax credit.  You may exclude up to $13,400 from your income in 2015.  So, for example, if your employer offers adoption assistance payments of $5,000 and your total adoption related expenses were $18,400, you could claim $13,400 as a tax credit AND exclude $5,000 from your income.  However, if your total expenses were $13,400, you could not take the credit and the exclusion-the same expenses cannot be counted twice.  The income limits for the tax credit also apply to the exclusion.

Subsidy for Full Time Military Personnel
There is a one-time reimbursement program available for full-time military personnel of $2,000 per child per calendar year, with a cap of $5,000.  The service member applies for the reimbursement by submitting a DD Form 2675 no later than one year after the adoption is final.  You cannot claim expenses that were reimbursed through the Federal Tax Credit or a Corporate Matching Grant.  See http://www.dfas.mil/militarymembers/payentitlements/adoptionreimbursement.html.  A recent change of policy permits a military member adopting a step-child to claim reimbursement.

Adoption Loans and Grants
Adoption Loans can be obtained from Americas Christian Credit Union or Entrust Financial Credit Union, among other financial service providers.  Additionally, a number of foundations provide grants with specific eligibility criteria.

Adoption Subsidies and Financial Aid for Adopting an Older Child
If you adopt a special needs child or a child from foster care, the cost is usually less.  A monthly adoption subsidy is often available to help pay for everyday expenses and special services such as remedial educational services, physical therapy and medical care.  You may also take the entire amount of the federal tax credit even if you don’t incur those costs.


There are two methods of adopting an older child: you may apply to become a foster parent through your local public agency.  If the child becomes free for adoption and there are no approved relatives, you would have first priority to adopt that child.  Alternatively, you can apply to adopt an older child through a private agency.  Adoptions Together, Catholic Charities and United Methodist Family Services have private programs.  These children are already free for adoption.  The cost of the private programs is slightly more than the public programs.  However, it is still significantly less expensive than any other form of adoption.