How adoptive parents can meet adoption-related expenses-Part I
For many Illinois residents, the prospect of adding a child to a family can be exciting. The process of adoption, however, can be expensive, time consuming and lengthy. In almost every case, planning is what will make the process run more smoothly. In an earlier post, we discussed the universal costs of adoption as well as the costs for certain routes such as private adoption agencies. In this post, we discuss the resources that can help an individual or a couple meet these adoption costs.
Tax credits, subsidies, employee benefits and grants can defray the overall costs of adoption for those who qualify. Tax benefits are available, but the amount depends on a family’s income and whether the child to be adopted has special needs.
Parents who adopt may be exempt from having to pay certain taxes under the adoption assistance program. The Affordable Care Act of 2010, for example, has revised tax credits that can make it easier for a family to adopt. The adoption credit is refundable, so any tax credit could be reduced. If the credit is higher than the liability, then the adopting parents may be eligible for a tax refund from the Internal Revenue Service.
Prospective parents should discuss tax benefits and obligations with a professional to determine what an adoption will actually cost and whether they will be eligible to take advantage of the various tax credits following the federal Fostering Connections to Success and Increasing Adoption Act of 2008.
The IRS also answers many other frequently asked questions about adoption. These can be found at the Internal Revenue Service’s website on adoption tax credits. Some state benefits may also be available. To find out what benefits are both available and helpful, prospective adopting parents should contact an experienced legal professional.
Source: ChildWelfare.gov, “Costs of Adopting,” Accessed on June 23, 2015