Bringing Home the Orphans

A Child's Desire

Financing an Adoption

Try our Fundraiser - We have a great adoption fundraising program open to any adopting family.

Federal Tax Credit:  $10,000- The federal adoption tax credit is more beneficial than a simple tax deduction. Under the tax credit, adoption expenses may be deducted from your overall federal tax liability. For example, if your federal tax obligation is $4,000 and you have $3,000 in adoption expenses, your tax liability is reduced to $1,000. Additionally, if your tax bill is smaller than the amount of your expenses, you can carry forward the unused portion of your adoption tax credit for the next several years. Qualified adoption expenses may include adoption fees, attorney fees, travel costs, including necessary transportation, meals, and lodging.

IRS Publication 968 or call 1-800-TAX-FORM and request a copy

State Tax Credit or Deduction Some states (AZ, CA, ID, IA, KS, MD, MA, MI, NM, ND, OK, UT, WV, and WI) offer a tax credit or deduction in addition to the federal tax credit. Ask your tax advisor about possible state credits.

Dependency Exemption – Adoptive parents are eligible for federal and state dependency tax exemption for their adopted children. The amount of exemption is adjusted annually and helps by reducing your taxable income.

Employer Benefits- Roughly 25% of companies in the United States offer some form of adoption benefits to their employees. Typical benefits may include reimbursements of adoption expenses; paid leave in addition to vacation time, sick leave, or personal days; and unpaid leave. Reimbursement amounts can run from $1,000 to $10,000. To find out whether your employer offers adoption benefits, contact the human resources office where you work.

Subsidies- Families who adopt children with special medical, emotional, and/or developmental needs; older children; or members of a sibling group may be eligible for an adoption subsidy from federal and state governments. This financial assistance is available to ensure that families who adopt these children have the necessary services and financial resources to meet their children's ongoing needs. These subsidies are generally only available for adoptions within the United States. Check with you state government or social worker for details.

Military Subsidies- Active-Duty military personnel can receive up to $2,000 reimbursement per child for many adoption-related expenses up to a maximum of $5,000 in one year. Reimbursement does not include travel costs, but does include medical costs for a birth mother and the child. Reimbursement can occur only after the adoption is finalized.

Credit Cards – Some adoption agencies offer adopters the opportunity to pay for all or a portion of their expenses by credit card. Adoptive families can use cards with cash-back or airline mileage benefits to help with expenses or to defer payments until tax credits are received.

Loans – Home equity loans are available through many banks with some offering up to 125% equity loans on your home. Some banks and Credit Unions have specific loan programs for adoption. Family members may be interested in offering you a loan at a more attractive rate than the bank with more lenient payback options.






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