Financial Options for Adoptive Parents
IRS tax credit of $11,650 for 2008
The Hope for Children's ACT was established to help adoptive families receive a tax credit when adopting children domestically or internationally. As an adoptive parent, you may be eligible to receive a one-time tax credit of up to $11,650 once your adoption is complete. Also, if you adopt a "special needs" child, you may claim the full credit even if you spend less than $11,650. This is a one-time tax credit, within a five year period from the time the adoption is complete. A credit is a dollar for dollar reduction in your tax bill for the coming year. There are income restrictions and specific ways in which you must apply for the credit, so check the IRS website for more current information.
SC Tax Credit
Families may be eligible for a $2,000 income deduction on their South Carolina Individual Income Tax return if they have adopted a special needs child. The deduction may be for or begin in the tax year in which the adoption was made final. A letter from the adoption agency certifying that their adoptive child was a special needs child should be attached to the family’s tax return. Consult the instructions accompanying state tax returns or a tax advisor.
Employee Benefits Programs
Check to see if your employer offers some type of adoption benefits to their employees. Benefits may include direct reimbursement anywhere from $2,000 to $10,000 once adoption is finalized, paid leave in addition to or including vacation time, sick leave or personal days, and medical expenses for the new child.
State of SC employees can check the Employee Insurance Program website for details on their Adoption Assistance Program. http://www.eip.sc.gov/
Federal employees can check the Office of Personnel Management website for detail on adoption benefits. http://www.opm.gov/employment_and_benefits/worklife/officialdocuments/handbooksguides/adoption/index.asp
Federal Family Medical Leave Act
Unpaid leave under the Federal Family Medical Leave Act is also an option. This act allows individuals to take up to 12 weeks off, unpaid with benefits without jeopardizing employment. The leave can provide valuable time for newly adoptive families to bond with their new child.
SC DSS Adoption Assistance
1. Reimbursement of certain nonrecurring costs incurred by families adopting special needs children is available to all families regardless of family income. These expenses could be attorney fees, court costs, travel and overnight accommodations that are directly related to the adoption.
2. Payment for medical care, therapy or other services related to a diagnosed physical or mental disability existing prior to adoption and not covered by the adoptive family's insurance, medical or other community services.
3. Monthly cash benefit based on the need of the child and the circumstances of the adoptive family.
4. Nonrecurring costs are reimbursed after the adoption is finalized.
5. Adoption Assistance Agreements for ongoing payments are reviewed annually to determine if the child continues to be eligible.
6. If a child is eligible for a monthly cash benefit, it may continue with annual reviews until the child reaches age 18 or 21 if the child is a full-time student.
For additional information please contact your area DSS office.
Military Subsidies
The military will reimburse active-duty personnel for most one-time adoption costs up to $2,000 per child. For more information about this reimbursement, check out Child Welfare Information Gateway http://www.childwelfare.gov/pubs/f_milita.cfm.
Loans and Grants
Parents may be eligible to receive a loan or grant to defray some of their adoption costs. Each program determines eligibility requirements. See our Resources page for organizations that can help with adoption expenses.
