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Adoption costs can vary in the type of adoption services (agency or attorney) and the type of adoption program (domestic, international, foster care or relative). Adopting from the foster care system, stepparent adoptions, and relative adoptions tend to be the least expensive. Domestic adoption costs can vary depending on the types of services offered, state fees, possible travel expenses, and possible birthmother expenses. The search process for locating birthparents can be expensive. Potential adopting parents can choose whether to pay for the location service or try to locate birthparents on their own. International adoption expenses also vary depending on services, dossier fees, travel expenses and individual country fees.
A federal adoption tax credit is available for up to $10, 000 per child. This credit is available for domestic or international adoptions. Parents who adopt domestically may be able to claim credit for qualifying expenses even if an adoption is unsuccessful. Parents who adopt a child from the U.S. with special needs can claim full credit without qualifying expenses. Some states offer tax credits as well, in varying amounts. Check with your tax preparer to find out what you qualify for, and for the most up-to-date tax law information.
Adoption costs can be managed through careful financial planning. Some adopting couples have worked with friends, families, churches or other local organizations to raise money to help them with their adoption. Loans from a commercial lender or financial institution can be taken out to help parents with the cost of an adoption. Potential adoptive parents should check into their employer's adoption policies, since some companies will offer adoption benefits. Couples may also be eligible for an adoption tax credit-although this will not be available to them until after the adoption is finalized in most cases. Government subsidies may be available for foster care adoptions or special needs adoptions. Medical expenses can be lessened if the birth mother has her own insurance or is eligible for Medicaid. In some cases, the adopting couple's insurance policy may cover the birth mother's medical expenses after the adoption.
For most adoptive parents, financing an adoption can seem impossible. Many save for years, cash in stocks and bonds, or take loans out of their 401K, through their bank, or use credit cards. The decision to take out a loan to pay for expenses can be difficult because it can take years to pay off. Before you use credit to afford an adoption, research other avenues of paying adoption costs. A few ideas are: sell assets to go toward the cost of adoption, hold yard sales, get a second job strictly for adoption expenses, or apply for grants from charitable organizations that will help fund adoptions.