Did you know that most of the costs of an adoption will be returned to you through federal tax credits?
Effective January, 2002 there is a $10,000 per child credit that you can receive for adoption expenses. You should get Publication 968 – Tax Benefits for Adoption, which can also be downloaded online: www.irs.ustreas.gov or CHI will send you a copy. View PDF file at: http://www.irs.gov/pub/irs-pdf/p968.pdf
Use the following websites to find out more about financing your adoption:
www.AdoptionTaxCredit.com Information and support on the adoption tax credit.
Your State may support you in tax credits for up to 10,000. Many States offer extensive tax credits – up to $10,000.
Corporate Matching Gifts. (Employer Adotpion Benefits)There are many corporations that have adoption assistance programs (AAPs). Check with your employer’s human resource department to see if they have an AAP or other adoption assistance benefits.
On the web, check out, or http://abanet.org/family/advocate/sp97tax.html for very important details.
Borrow from your 401-k – Many 401-k plans now offer loans from your retirement savings. This is usually a very-low interest rate. Many people are able to fund their entire adoption from this one loan. Talk to your employer to see if this is an option for you.
MNBA offers unsecured loans specifically designed for adoptive parents Call 888 627 9767
Military, Nonrecurring Program.
There is a one-time subsidy program available for full-time military personnel. Currently adoption couples or singles can receive up to $2000 per child or $5000 maximum for siblings.
Many military personnel do not know this is available to them.
Military families are entitled to adoption benefits of up to $2,000 a year for reasonable and necessary expenses associated with adoptions finalized after October 1, 1990, whether they are infant adoptions, intercountry adoptions, or adoptions of children with special needs. The benefits cover the following:
- Public and private adoption fees charged by an agency in a foreign country;
- Placement fees, including fees charged to adoptive families for counseling;
- Legal fees, including court costs, in connection with services that are unavailable to military personnel through their legal assistance office;
- Medical and hospital expenses of a newborn; and
- Medical expenses incurred by a birthmother.
- Benefits are paid after an adoption is finalized, and apply to both singles and couples.
Nonrecurring Federal Adoption Program
This is a one-time federal adoption program, administered by the states, and includes foreign-born children adopted by U.S. Citizens. State Reimbursement A reimbursement for non-recurring adoption expenses (agency fees, legal costs, and transportation) is available through each State for families who adopt children with special needs (children from minority cultures). Half of the expenses are paid through State funds, the other half through federal funds up to $2,000. The benefit differs by State depending on the cost of the adoption, State rules, and public awareness. Reimbursement for Non-Recurring Expenses, Dependency Exemption , http://www.pueblo.gsa.gov/cic_text/children/adoption/helpc.html
Suggestions from the National Endowment For Financial Education
Visit the site: www.nefe.org for detailed information.