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Adoption expenses: Where to go for help
By Adoptive Families Magazine
Many parents wonder how to meet the cost of adoption. Make use
of the credits, benefits, subsidies, and other resources listed
below.
Federal adoption expense tax credit
Beginning with tax year 2002, the federal adoption expense tax
credit increased to a maximum of $10,000 per adoption. The credit
begins to phase out at $150,000 of modified adjusted gross income.
Families adopting U.S. children with special needs may take the
$10,000 credit regardless of their actual expenses. For detailed
information, download IRS Publication 968, "Tax Benefits
for Adoption," from the IRS Web site: http://www.irs.gov/pub/irs-pdf/p968.pdf.
Read also "The Adoption Tax Credit" by Mark McDermott
on the Adoptive Families Web site: www.adoptivefamilies.com/clip.php.
And, also, see IRS comments here: www.irs.gov/taxtopics/tc607.html
State tax credits
Several states have enacted tax credits for adoptive families.
Some are restricted to those adopting from the public system in
that state. Contact your state adoption unit for more information.
Adoption subsidies
Children with special needs may qualify for an adoption subsidy
to help parents pay for ongoing treatments. Adoption subsidy agreements
must be negotiated with the placing agency before the child's
adoption is finalized. More information is available from the
North American Council on Adoptable Children: www.nacac.org/subsidy_factsheets.html.
Nonrecurring adoption expense reimbursement
Families who have finalized the adoption of a child from the public
child welfare system may be able to apply for reimbursement of
expenses related to the adoption, which may include home study
fees, travel expenses, attorney fees, etc. For more information:
www.nacac.org/subsidy_stateprofiles.html.
Military subsidies: Active-duty personnel are reimbursed for one-time
adoption costs up to $2,000 per child, whether adopting an infant,
a waiting child, or a child from abroad.
Employee benefits
Both the number of employers providing benefits for employees
who adopt (including leave when a child arrives in the home, reimbursement
of adoption expenses, and assistance with adoption information
and referral services) and the dollar amount of these benefits
are growing. The average expense reimbursement now approaches
$4,000, with some employers providing up to $10,000. For help
asking your employer for this benefit, see the National Adoption
Center's adoption and workplace initiative: www.adopt.org/workplace.
Also read Elizabeth Mair's article "How to Lobby Your Employer
for Adoption Benefits" online: www.adoptivefamilies.com/clip.php.
Adoption grants and loans
A number of adoption agencies and organizations offer adoption
grants and/or low-cost loans. Some are limited to certain types
of children or adoptions, while others are available to any prospective
parents who meet the organization's criteria. Examples of adoption
agencies with such grant or loan programs: Holt International,
World Association for Children and Parents (WACAP), Dillon International
(for contact information, see the adoption program listings in
this Adoption Guide). Two organizations offering adoption grants
are the Gift of Adoption Fund: www.giftofadoption.org,
and A Child Waits, www.achildwaits.org
(Eastern European adopters). For more granting organizations,
search the Web for "adoption grants," but be wary of
demands for application or other fees.
Creative financing
Adoptive Families readers report financing adoptions through some
or all of the following activities: bake sales, car washes, bowl-a-thons,
grandparent or family member financial assistance, using their
own or donated frequent flyer miles for travel, negotiating a
second home study from the same social worker at a reduced rate,
adopting via an agency that offers a sliding scale for fees, tapping
into 401ks or home equity. If you come up with an unusual way
of funding your family's adoption, please share it with the readers
of Adoptive Families by writing to: letters@adoptivefamilies.com
Other resources
Read "How to Make Adoption an Affordable Option," a
comprehensive booklet from the National Endowment for Financial
Education. It is available on the Web at www.nefe.org/adoption,
or order it from the Consumer Information Center (Item #508-F):
888-878-3256. Also, consult the Burke Family's comprehensive list
of adoption funding sources: www.angelfire.com/journal/adoptionhelp/adopthelp.html.
Finally, join a listserve for families who want to share ideas
about raising funds for their adoption: http://groups.yahoo.com/group/fundraisingforadoption.
Another listserve is for families who are saving for their adoption
using various frugal methods like cutting expenses, working extra,
saving all bonus and tax checks, yard sales, etc.: http://groups.yahoo.com/group/FrugalFundingForAdoption/
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