Our Children’s Homestead believes finances should not stop a child from having a loving family. We offer you these resources to help offset the cost of adoption.
Reduction of Adoption Program Fee
There may be a reduction in the adoption program fee if the child you are adopting has moderate to severe special needs. This is determined on a case-by-case basis. There is no reduction in fees for children with minor special needs.
Our Children’s Homestead strongly recommends adoptive families consult a legal or tax professional with relation to any adoption credit.
Hope for Children’s Act
The Hope for Children Act (Public Law 107-16) has resulted in increased adoption tax credits for “qualifying adoption expenses.” It also increases the employer adoption assistance exclusion.
Our Children’s Homestead has prepared this brief overview of the Adoption Tax Credit with direct links to forms and resources. This document is a general guideline for the new provisions of the adoption tax credit. It should not be used as a definitive source of information for individual cases. http://www.irs.gov/formspubs/index.html
What are “qualified adoption expenses”?
According to the IRS: “Qualifying adoption expenses are reasonable and necessary adoption fees, court costs, attorney fees, traveling expenses (including meals & lodging) and other expenses related to, and whose principal purpose is for the legal adoption of an eligible child.” These are calculated by adding up such expenses related to adoption and subtracting any amounts reimbursed or paid for by employer, government agency or other organization.
Who qualifies for the tax credit?
Persons with modified adjusted gross incomes, as per the most recent tax credit policy.
Please refer to IRS Publication 968 for specific information relating to applicable adoptions that qualify; how special needs adoptions qualify; how this works for domestic adoptions. (See tax consultant for each inquiry)
Federal Adoption Tax Credits
Families are currently able to claim a tax credit for adoption expenses. (Please see your tax consultant for the most current credit information.)
IRS Publication # 8839: Qualified Adoption Expenses
HR 1836 – Tax Reconciliation Bill (provisions for adoption tax credit)
State Tax Credits
Some states provide non-recurring adoption fee reimbursements. (Please see your tax consultant.)
Your employer may offer adoption benefits to their employees. Some companies offer paid and unpaid leave. Check with your Human Resources department.