The costs associated with adoption may seem overwhelming at first. But with the help of the federal adoption tax credit of up to $12,970 (for tax year 2013) and a variety of other available funding sources, adopting may be more affordable than you think!
Below are several funding resources to consider.
Federal Adoption Tax Credit
Internal Revenue Service
Hours of Operation: Monday – Friday, 7 a.m. – 10 p.m. your local time
The adoption tax credit offsets qualified adoption expenses, making adoption possible for families who could not otherwise afford it. Taxpayers who adopt an eligible child may qualify for an adoption tax credit. In general, the credit is based on the reasonable and necessary expenses related to a legal adoption, including adoption fees, court costs, attorney’s fees and travel expenses. Income limits and other special rules apply.
Frequently Asked Questions compiled by the Adoption Tax Credit Working Group (January 2013)
- The Adoption Tax Credit has been made permanent.
- Adoption Tax Credit Amounts (if Congress makes no changes):
2011: $13,360 (indexed for inflation, refundable)
2012: $12,650 (indexed for inflation, non-refundable)
2013: $12,970 (indexed for inflation, non-refundable)
- The Adoption Tax Credit is refundable only through 2011.
- Unused credit may be carried forward up to five tax years.
For detailed advice regarding the credit, contact a tax advisor.
Links to additional resources:
2013 Policy Priorities and Adoption-Related Legislation (2013) - article in Adoption Advocate, a publication of the National Council for Adoption
Tax Benefits for Adoption: the Adoption Tax Credit (rev. 2011) - article in Adoption Advocate, a publication of the National Council for Adoption
Questions and Answers on Adoption Benefits
Adoption Credit, IRS Tax Topic 607 – information on qualifying expenses paid to adopt
State Tax Credits
Many states also offer adoption tax credits. Visit your state’s web site or contact your tax advisor to find out if a state tax credit may be available to you.
Check with your employer to see if your workplace has an adoption benefit. If they do not, the “Adoption-Friendly Workplace” program listed in the resources below offers information and tools to propose one to your employer. A listing of the best adoption-friendly workplaces is also available on their web site.
Additional Financial Options
Resources For Adoption
Provides the very latest in adoption financing education, information and resources… including a comprehensive database of adoption grants and loans. Families who sign up to download the chart will be notified by resources4adoption.com when an update is made.
America’s Christian Credit Union
Offers adoption loans for families who are pursuing international or domestic adoption. Applicants are required to become members of the credit union and must sign ACCU’s Statement of Faith.
Adoption loans are available up to $50,000 for terms up to 60 months at competitive interest rates. Applicants must meet credit standards set by ACCU. Once approved, loan proceeds will be immediately available to the borrower. Repayment of principle + interest begins as soon as the loan is disbursed.
The ABBA Fund
They provide financial assistance for parents who believe that God is calling them to grow their families through adoption and need help with the “cash flow crunch” posed by adoption expenses. Help churches establish adoption funds.
P.O. Box 78800
Charlotte, NC 28271-704
Adoption Friendly Workplace
The “Adoption-Friendly Workplace” program offers information and tools to help you establish an adoption benefits policy for your employees or propose one to your employer.
A Child Waits Foundation
Provides low interest loans for families who have exhausted other financial options and could not proceed with their adoption without this help.
A Child’s Desire
Offers grants to parents adopting hard to place children, special needs children, and children over the age of eight. Offers adoption grants to nonprofit agencies as well as an adoption fundraising program to adopting families.
Christian Advocates for Adoption, Inc. (CAFA)
This organization works with Christian couples. They start with a homestudy and application that is reviewed by CAFA board members. Then they send funding packets to clients who contact friends, family and acquaintances requesting help with the costs of the pending adoption. As a 501(c)(3) ministry donations to CAFA are tax deductible. Money is then distributed to our clients for use in paying for the adoption.
P.O. Box 364
Hudsonville, MI 49426-0364
Gift of Adoption Fund, Inc.
Provides grants to families with financial need who are seeking to adopt.
P.O. Bos 567
Techny, Illinois 60082
Global Orphan Outreach
Exists to help adoptive families find and apply for adoption grants. This organization will research which grants are best for you, apply and fill out all paperwork for those grants for you, have them ready for your signature, and have them ready to be mailed in pre-addressed envelopes.
c/o Donna Barber
W6126 Hraban Road
Tony, WI 54563
God’s Grace Adoption Ministry
This is a non-profit organization helping adoptive parents overcome the financial burden of adopting children. It is not an adoption agency, but rather works in cooperation with the agency to assist the family with their financial needs. Depending on the individual family needs, financial assistance is available in the form of grants and interest free loans.
P.O. Box 4
Modesto, CA 95353
This is a national non-profit 501 (c)3 financial assistance grant program that will provide qualified couples and individuals with grants of up to $15,000 towards their adoption expenses. Grants are awarded twice a year in June and December.
His Kids Too!
This 501(c)(3) charity, is a wonderful grant program designed so that your friends and family can assist you financially with adoption costs. Donors make tax-deductible donations to His Kids Too!, and adoptive families apply for a grant from the funds generated by donors. The benefit of this program is that you are in control of your fundraising efforts and donors will have complete confidence that donations will go directly towards adoption expenses.
Home for Good Foundation
Home for Good is involved in the ongoing work of planting adoption ministries in churches around the world. These ministries are created to support families who would like to adopt but are burdened by the cost.
Kingdom Kids Adoption Ministries
Determination of grant amounts is based on a combination of the needs of the child, cost of the adoption, financial situation of the family and fundraising efforts.
Lifesong for Orphans
Lifesong for Orphans offers a “matching grants” program as well as interest free loans.
Our Creator’s Hope, Inc.
They believe that going into debt to give a child a home should not be necessary, so based on fund availability, OCH awards financial grants in the amount of $1,000-$10,000 to qualified families for domestic and international adoptions. OCH is a non-profit organization.
The National Adoption Foundation has partnered with Prosper.com to provide adoptive families with adoption loans to receive the financing they need. Prosper is America’s first peer-to-peer lending marketplace that has over 1,480,000 members. They connect people looking to borrow money with people who have money to invest.
Saving Children, Building Families
The Saving Children, Building Families Foundation believes that every child deserves a home. Their goal is to direct the limited funds available to where it will do the most good based on the available information. They prefer to fund international adoptions.
Sea of Faces
In order to be good stewards of the finances we’ve been given, applicants must meet the below criteria to be considered for a grant:
- You are adopting a child from a developing country
- You have a completed home study
- You are a married couple, one man and one woman
- Both individuals are professing Christians
Awards financial adoption grants to qualified families already in the process of adopting. The size of the grant awarded is determined by several factors, the most important being need.
PO Box 647
Franklin, TN 37065