Financing Adoption

One of the major roadblocks in making the decision whether to adopt a child is the cost of adoption. Adoption fees vary greatly and sometimes depend on whether you adopt an infant or an older child. Whether you use a private or public agency, an attorney, or intermediary also affects adoption fees. There are many sources of help for adoption costs.

Federal Tax Credits and Tax Exclusion
A federal income tax credits and a tax exclusion may be available to defray some adoption costs. For 2008, the IRS provides a tax credit up to $11,650 for qualified expenses paid to adopt an eligible child. Prospective adoptive parents can find information about tax rules regarding adoption at the IRS website. Parents should look for information at the listed website.

Employer Benefits
Many employers provide a range of benefits for families who adopt, including paid or unpaid leave when a child arrives in the home, reimbursement of some portion of adoption expenses, or assistance with adoption services. Corporate human resource departments can provide employees with information about any benefits available.

Subsidies and Reimbursements for Children with Special Needs
For the adoption of a special-needs child from the foster care system, the State of Texas offers Medicaid health care coverage, reimbursement of one-time adoption-related expenses, and monthly payments to assist with the child’s needs.

Military Reimbursements
The military provides active-duty personnel a reimbursement for most one-time adoption costs up to $2,000 per child. The maximum amount available in a given year is $5,000, even if both parents are in the military. Reimbursement is made after the adoption if finalized.

Adoption Loans and Grants
Adoptive parents may be eligible to receive a loan or grant to offset some of their adoption costs. Such programs may have specific requirements or financial need considerations. Many agencies also have adoption grant programs. The Lake Pointe Church Adoption & Orphan Ministry provides an adoption grant fund through contributions from those who wish to remove the financial roadblocks to adoption.