One of the first questions that I am typically asked by hopeful adoptive parents pursuing domestic adoption is “How much does adoption cost?”
If you are adopting from the foster care system, there is little to no cost. In addition, you receive a small monthly stipend to assist with expenses for the child.
If you are pursuing private adoption, the costs in California typically range from $25,000 to $40,000. The breakdown of where that money goes will vary in each case, but generally it pays for the following:
Agency or facilitator fees
Home study fees
Adoption Service Provider (a social worker that advises the birth mother, which is required in independent direct placement adoptions in California)
Attorney’s fees for both the adoptive parents and the birth parent(s)
Birth mother expenses, including counseling and medical expenses related to the pregnancy
Tax credit
There are a few federal tax benefits for adoption, including a tax credit for qualified adoption expenses paid to adopt an eligible child and an exclusion from income for employer-provided adoption assistance. The credit is nonrefundable, meaning that it is limited to your tax liability for the year (but a credit in excess of your tax liability may be carried forward for up to five years). In 2018, the maximum tax credit was $13,810 per child (this amount is annually adjusted for inflation). The credit is reduced proportionately for taxpayers with modified adjusted gross income over $207,140 and is phased out completely for taxpayers with more than $247,140 in modified adjusted gross income (these amounts are also subject to annual inflation adjustment). For more information, see the IRS’ website here. I recommend speaking with a certified accountant or tax attorney if you have specific questions regarding your tax liability and eligibility for this credit.
Employer programs
Many employers have adoption assistance programs that provide reimbursement for adoption-related expenses, which can typically be claimed in the year that the adoption is finalized. Be sure to check your and your spouse’s employer benefits to determine whether such a program applies to your family. Also, for additional information about adoption friendly workplaces, see this list created by the Dave Thomas Foundation for Adoption.
Grants/fundraising
Many people fund a portion of their adoption through grants. A simple google search can help you find a number of grants that are available to hopeful adoptive families. Always read the eligibility requirements closely to ensure that you meet the criteria before applying. Many families also rely on fundraising or crowdsourcing in order to raise the funds needed to adopt. From selling t-shirts, to baked goods, to auctions, people get very creative in order to raise the money necessary to grow their families.