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Traditional Ways to Pay for Your Adoption

Mortgage and Refinancing – An adoptive parent wrote: “We are close to having everything done to send in our home study paperwork and we just got our mortgage commitment papers. We rolled our home equity loan and current mortgage into a new mortgage at a lower rate and will be saving a few hundred dollars a month now and have gotten cash out with the new mortgage as well. That cash is our adoption finance!

Travel Expense Assistance - Requires some legwork by making plenty of contacts. Finding travel expense help doesn’t require the approval process, just a few phone calls and giving yourself the time to do this.

Military Benefits - Full-time military personnel (married couples and singles) are eligible for a one-time subsidy program. You should check with your base personnel for current benefit levels. Typically, military families can receive up to $2,000 a year for adoption related expenses. Benefits are paid after an adoption is finalized. Visit the following sites for more information: Military Adoption, Child Welfare and Military Family.

Government Assistance-

  • Federal Adoption Tax Credit: Tax credit for qualifying expenses paid to adopt an eligible child (including a child with special needs). The adoption credit is an amount subtracted from your tax liability. For both the credit or the exclusion, qualifying expenses include reasonable and necessary adoption fees, court costs, attorney fees, traveling expenses (including amounts spent for meals and lodging while away from home), and other expenses directly related to and for which the principal purpose is the legal adoption of an eligible child. An eligible child must be under 18 years old, or be physically or mentally incapable of caring for himself or herself. The adoption credit or exclusion cannot be taken for a child who is not a United States citizen or resident unless the adoption becomes final. You may download Publication 968, Tax Benefits for Adoption, from www.irs.ustreas.gov or www.adoptiontaxcredit.com.
  • State Subsidies/Reimbursement for Non-Recurring Expenses: Many states offer reimbursement for adoption expenses for families who adopt children with special needs. Some subsidies apply to international adoptions and some do not. Contact your state Division of Family Services and State Tax Office to find out if you qualify. Please consult a tax accountant for details about these benefits.

    • Employer Benefits – Ask your employer if they offer adoption benefits and if they don’t, encourage them to develop a program. A list of companies that offer adoption benefits and how to get a program started can be found at the Dave Thomas Foundation For Adoption®. You can also find an Adoption Benefits Toolkit for Employers by clicking on “How We Can Help You” and going to the Employers sections to request the Toolkit.