Investigate adoption expenses

Step 3

Many agencies do not charge service fees to families who adopt children with special needs. However, you will need a homestudy, and because adoption is a legal process, you may need an attorney. The cost of a homestudy can vary from $0 to $2,000. Attorney fees and court costs can range from $1,000 to $2,000, and special needs adoptive families often incur additional costs for medical services, counseling, etc.—costs that may continue throughout the child’s lifetime. Fortunately, due to federal and employer-initiated programs, parents have several options for covering the cost of special needs adoption.


Loans

Though many loans are project-specific (like a car loan or a home mortgage), some can be used for whatever the borrower wants. Two such flexible loans are home equity loans (money borrowed against the value of your house), and insurance loans (money borrowed against the cash value of your life insurance policies). These loans can be obtained at relatively low interest rates and with a choice of payment terms. For more information on these kinds of loans, contact a bank or mortgage company, or your life insurance company.


Newer adoption-related foundations also offer financial assistance to those hoping to adopt. The organizations listed below (among others) allow or encourage parents who are hoping to adopt children from foster care to apply for assistance:


Fore Adoption Foundation

www.foreadoption.com

(founded by professional golfer Kirk Triplett and his wife Cathi)


Gift of Adoption Fund

www.giftofadoption.org

Email: grants@giftofadoption.org


National Adoption Foundation (NAF)

100 Mill Plain Rd.

Danbury, CT 06811

www.nafadopt.org


Employer Assistance

Employers that offer adoption benefits may provide workers with:

  • direct cash assistance for adoption expenses
  • reimbursement of approved adoption expenses
  • paid or unpaid leave (above and beyond federal leave requirements established through the Family and Medical Leave Act of 1993)
  • resource and referral services

To request a list of employers who provide adoption benefits or learn more about workplace adoption benefits, contact the Adoption Friendly Workplace Program. Call 1-877-777-4222, send an e-mail to info@adoptionfriendlyworkplace.org; or visit www.adoptionfriendlyworkplace.org.


Tax Credits and Exclusions

Since tax year 2003, parents who adopt children who have special needs from the U.S. foster care system (and whose annual adjusted gross income is less than $190,000) have been able to claim up to $10,000 (plus annual cost-of-living adjustments) in tax credits or exclusions to offset adoption costs without documenting adoption expenses. For more information about the credit and exclusion, review IRS Publication 968, “Tax Benefits for Adoption.” Learn more from the Internal Revenue Service; call 800-829-3676 or visit www.irs.gov.


Adoption Subsidies

If you adopt a child who has special needs, she may be eligible for a federal or state adoption subsidy (also known as adoption assistance). In general, children who are in the custody of state or county child welfare agencies (in foster care) are eligible for adoption assistance benefits.


Benefits available through subsidy programs vary from state to state, but commonly include:

  • monthly cash payments — up to an amount equal to the foster care payment the state would have made if the child were still in basic family foster care.
  • medical assistance — Medicaid benefits are provided through the federal program and some state programs. States must also provide health insurance for children whose parents have a signed adoption assistance agreement with the state if the children’s special needs are based on a need for medical, mental health, or rehabilitative care.
  • social services — post-adoption services such as respite care, counseling, day care, etc.; or
  • nonrecurring adoption expenses — a one-time reimbursement (up to $2,000) for costs such as adoption fees, court costs, attorney fees, physical or psychological examinations, and other expenses related to the legal adoption of a child who has special needs.

Before adopting a child who has special needs, ask your agency about federal and state subsidies.


To learn more about eligibility requirements for individual state subsidy programs, you will find links to state adoption subsidy profiles on the NACAC website. This information will open in a new browser window. Return to AdoptUsKids.org by closing that browser window.


Next Step


The information on this page is used with the permission of the North American Council on Adoptable Children (NACAC). http://www.nacac.org/