Do You Have To Pay For Adopting A Child?

Adoption is the ultimate gift to a child and his or her parents. However, it is also an expensive one. With the rising costs of medical care, housing, food and education, many adoptive families struggle to make ends meet. Some children in foster care need to wait years for a permanent family, while others are adopted immediately upon entering the system.

Some adoption agencies, such as the nonprofit Open Door, allow prospective parents to adopt for free. Others require that parents provide a certain amount of financial support for a child. Still others charge fees for everything from finding the child to placement, screening, and counseling. The cost of adoption varies widely depending on the type of agency, the type of adoption, and the number of children being adopted.

There are several ways to help families pay for adoption. Some families save money by using the public assistance program Temporary Assistance to Needy Families. If they qualify, the federal government covers 100 percent of the agency’s cost to find a child. Families must use an adoption agency approved by the state where they live. They are also responsible for any legal fees that the agency incurs.

Another option is the National Adoption Tax Credit, which can provide up to $13,570 for qualified costs for adoptive families. This is generally paid back in monthly tax credits that can be applied to the recipient’s taxes. The credit is available for the first two years of adoption and is based on the age of the child. For example, a family adopting a child under the age of 3 qualifies for the full $13,570. A family adopting a child aged 3-4 receives $5,175. Families who adopt a child aged 4-5 receive $3,835. There is no limit on the amount of the credit that can be claimed. However, the IRS can reduce the credit if a family fails to maintain accurate records.

The National Adoption Tax Credit can only be used for qualified costs. Qualified costs are defined as those that are necessary for the adoption and include the agency’s fee, legal expenses, adoption counseling and training, and health screenings. Qualified costs do not include fees to file for the adoption, transportation costs to the birth parents, and other fees associated with the adoption process.

Families can claim the National Adoption Tax Credit either on their federal tax return or on their state return. The IRS requires that the agency’s application for the adoption be included with the family’s return. The IRS will then verify the qualifications of the adoption and determine the family’s eligibility. Families must file their adoption tax return no later than three months after the adoption is finalized.

Adoptions that are completed through private agencies are often covered by insurance. Parents who choose to adopt through private agencies are able to take advantage of the insurance benefits. The type of insurance will vary by parent’s individual plan, but it can include medical, dental, vision, life, and supplemental insurance. These benefits may be paid directly to the agency or the insurance company may pay the agency directly.

Adoptions that are completed through private agencies are often covered by insurance. Parents who choose to adopt through private agencies are able to take advantage of the insurance benefits. The type of insurance will vary by parent’s individual plan, but it can include medical, dental, vision, life, and supplemental insurance. These benefits may be paid directly to the agency or the insurance company may pay the agency directly.