Close this search box.
adoption tax credit

4 Ways to Help Finance Adoption

Adoption is a life changing process, but it can be an expensive one, too. As you embark on your adoption journey, it is never too soon to begin preparing your budget, researching assistance programs, and thinking creatively about fundraising. When the time comes, it will be important to have the financial nest egg available to pay for expected and unexpected expenses. Here are some common ways to defray the costs of agency and attorney fees, transportation, and birthmother expenses.

Employee Adoption Benefits and Assistance Programs

Many companies offer their employees help with their adoption through direct referral, counseling, cash reimbursement, and paid leave. First, see if your company offers an Employee Assistance Program (EAP). These programs are available to offer supplemental help when employees have dramatic and/or life-changing situations. Employers pay EAP providers to help their employees with referrals, appropriate expenses, and support.

Talk to your Human Resources Department and ask if your company offers any adoption-related benefits. Your employer may offer reimbursement for adoption expenses ranging from $2,000 to $10,000. Paid or unpaid leave when your child comes home, medical expenses for birthmothers, and adoption educational workshops may also be benefits included in your employee package.

Your company doesn’t offer these benefits? They may not know what they can legally provide. Refer them to the Dave Thomas Foundation’s Adoption Friendly Workplace Program. This program provides employers resources, information, and tool kits to implement adoption-friendly programs and services.

Adoption Tax Credits and Military Aid

The Federal Adoption Tax Credit has changed this year, and could change again in future years. It is vital for families to know how they may (or may not) directly benefit from this credit.

Back in 2002, the Hope for Children Act allowed families to claim a $10,000 tax credit for qualifying adoption expenses. Congress passed the American Taxpayer Relief Act, signed on January 2, 2013, making the Adoption Tax Credit permanent. The bill permanently extends the adoption tax credit, which is set at $10,000, but will again be scaled for inflation, bringing it to near the 2012 amount of $12,650. Families with incomes under $150,000 will receive the full credit, and it will gradually phase out for higher incomes.

An important change in this year’s credit is that it is no longer refundable. That means that lower or moderate income families who don’t have a high tax liability may not directly benefit from this non-refundable credit. For details, visit the Adoption Tax Credit Working Group’s fact sheet. Save the Adoption Tax Credit website, and Also ask your tax attorney about specific requirements.

And if you are on active duty in the military your family can receive up to $2,000 in qualifying expenses. Contact your military branch for details.

Loans and Grants

There are private loans and grants available for qualifying families. Typically, these organizations are looking to work with a diverse clientele of families facing difficult financial obstacles to adopting. Help Us Adopt takes applications twice per year; Gift of Adoption Fund, and the National Adoption Foundation also give grants and loans. Resources4Adoption provides an extensive database of up-to-date information on the loans and grants available to adoptive parents.

Adoption Fundraising

More and more pre-adoptive parents are getting creative at raising the necessary money to fund their adoption process. From backyard BBQ’s to running a 10k to creating a custom T-shirt to selling on websites like Etsy, you can use your time while you wait for a match to raise money in your community. Here is a great list of some common and creative fundraising ideas on this blog.

Just remember to create a budget and stay within it, no matter how promising a situation with a prospective birthmother looks. Randie Bencanann, Adoption Connection Co-Director says, “Some adoptive parents feel like if they don’t go for one situation, then another will never come along. This is not true!” No matter what your adoption budget is, you can be successful.

Related Post: Finding Neil, My Birth Father

Related Post: A Blended Adoptive Family – Writing Their Own Story

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top