Affording adoption can be a struggle, especially in the current economic climate. However, there are a number of things you can do that may reduce the cost of the adoption you are trying to pursue:
BHAS has structured its fees/costs/expenses for both domestic and international adoption so that families are paying a portion of the fees and expenses throughout their adoption process. This enables families to save or perhaps fundraise along the way. International fees are paid in installments approximately every three months; domestic fees and expenses are paid monthly after a match with a birth mother.
For a small fee, families can use their credit cards via Paypal for some fees, which also frees up cash for future payments that cannot be paid by credit card.
The adoption tax credit has been renewed in 2012. It is not refundable as it was in 2010 and 2011, and has been reduced from the 2011 maximum amount. The adoption credit is calculated on Form 8839 Qualified Adoption Expenses (PDF). You may claim an adoption credit of up to $13,360 (for tax year 2011) per eligible child and up to $12,650.00 per eligible child for tax year 2012.
In 2010 and 2011, you may be able to take a refundable tax credit for qualifying expenses paid to adopt an eligible child (including a child with special needs). This means that you could qualify for a tax refund even if you did not have federal income tax withheld. For tax years prior to 2010, the adoption credit is not refundable. The maximum credit is $13,170.00, reduced by employer contributions and possibly AGI. For more information see IRS Publication #968 or http://www.irs.gov/taxtopics/tc607.html
Currently, fourteen states offer some type of tax credit or deduction for adoption. They are AZ, CA, ID, IA, KS, MD, MA, MI, NM, ND, OK, UT, WV, and WI. Please consult your tax advisor for more details and for updated information about credits which might be available in your state.
The Adoption Tax Credit is a reduction in your tax liability for the year that your adoption is completed. The reduction is taken in the form of a direct credit to the amount of tax due on your 1040 return. Please consult your tax advisor for full details of the adoption tax credit.
While the tax credit only provides the actual cash after the adoption is completed and a tax return filed, if you are eligible, some families find that they can obtain short term loans from family members on the basis of the tax credit eligibility.
An adoption benefits plan is a company-sponsored program that financially helps or reimburses employees for expenses related to the adoption of a child and/or provides for paid or unpaid leave for the adoptive parent employee. Many employers are providing adoption assistance in the form of grants, reimbursement or other benefits. Other benefits may include paid and unpaid leave and counseling and support before and after adoption. If your employer does not offer a plan, ask! You may be able to show your employer the many benefits of offering assistance to families and children: minimal cost since few workers actually utilize the benefits; giving back to the community; social benefit since children and families are the beneficiaries of the companys support of adoption; keeping pace with other company trends; potential tax advantage if the benefits are directly deducted from payroll; and finally, the encouragement of loyalty from employees who have received the benefit. For ideas on how to approach your employer, see http://www.adoptivefamilies.com/printable/employment_benefits.html
This program allows reimbursement, up to $2,000.00 per child, for active-duty personnel. There are some restrictions on these funds, such as certain expenses that are not covered, and the requirement that a non-profit agency be used for the adoption. For information, see www.nmfa.org .
Below you will find a list of some of the financial resources dedicated to adoption and forever families. This list is ever-changing, as new and different resources become available to families, so check back from time to time or just Google Adoption Financing!
Credit unions do not typically have some of the issues that banks do, and may be a source for a loan more easily than a bank in the current economy.
Some families have borrowed from their own 401K account and repaid the principle and interest to themselves. Call your parents, brothers and sisters. They may have a little extra cash lying around to help you. BH has families that have lobbied their families for support, and were surprised at the help they were able to receive! You can pay them back as you are more able later on.