encyclopedia of adoption

adoption expenses, paying for

One of the biggest challenges adoption poses for some families is the fees. All adoptions have necessary fees, but prospective parents who adopt through public agencies have their costs underwritten by taxpayers' dollars. The public policy reason for paying the fees of those who adopt from the public foster care system is that the cost of the fees is much less than the costs would be to maintain a child in foster care until age 18.

The most important options for most adopting parents are federal and state income tax credits. The federal credit, which began in 1996 and currently will "sunset" in 2001, provides up to $5,000 for the adoption of an American child other than a child with special needs and $6,000 for the adoption of a U.S. child with special needs. The credit is complicated to calculate because it involves computing one's adjusted gross income. But most families earning less than $115,000 a year should qualify for some assistance. Those interested in learning more about how the tax credit works should check with their accountant, attorney or tax consultant. (The IRS also has a booklet on the tax credit.) Check also to see if your state is one that has a state credit or other benefit for adopting parents.

An expert on the subject of financing an adoption, Norman F. Hecht, Jr., has written widely and spoken to many professional adoption organizations on options families have to pay for an adoption. Hecht, an independent financial consultant, is an adoptive parent himself, and that interest, combined with his professional background in banking, led him to create one of the first programs through a bank for loans for adoption purposes.

Hecht lists six major sources of funding in his 1998 article for the FACE Adoption Resource Manual: family, savings, pension/retirement accounts, employer provider benefits, credit cards and bank loans. His chart (see below) delineates the relative benefits and drawbacks of each method of financing an adoption.

Most agencies, attorneys and adoption providers can assist prospective adoptive parents with information on paying adoption fees. Many have sliding-scale fees or otherwise waive all or part of the fees in order that worthy families can be assisted to adopt.

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