So you have decided to adopt? Well, many of those couples and families who have planned to adopt encounter a particular problem that has something to do with adoption financing. Many of them are anxious about the high financial overheads that can be associated with the adoption process and the other services that can be required for children with special needs. If this happens to you, then you are not alone. The good news is, a lot of adoption financing resources is out there to help you fund and complete your adoption plan.
There are a lot of them actually. The resources may include loans, grants, subsidies, and other financial programs like the Adoption Tax Credit. All of these options are available today, making your adoption experience easier than you think. But, before you decide on a particular adoption financing resources, make sure that you are comfortable and satisfied with your decision. Do some careful adoption financial planning and don't let the real costs deter you.
To learn more about the adoption financing resources, consider the following:
Adoption Tax Credit
Adoption is a very pricey undertaking that a couple or family could ever take. Because of this, thousands of couples out there who wish to adopt tend to back out from their adoption plans and rather stay hopeless of owning a child whom they can call as their own. To make these couples happy, certain Acts were created to make adoption affordable, and perhaps one of the most well-known financial assistance ever created was the Adoption Tax Credit.
The Adoption Tax Credit is in the first place a tax law provision that is deemed only applicable to the middle income families. It is complicated though, but many have agreed that it is a valuable benefit for families and couples who wish to adopt.
The adoption tax credit is said to be one of the most complicated options available for funding your adoption. It involves the process in which the adoptive parents are allowed to claim a tax credit, which is an amount subtracted from their tax liability. However, there is a particular requirement for the adoptive parents to meet. One of those is to make their adoption expenses qualified, and make sure that the children are eligible enough for adoption. If all of the requirements are met, the adoptive parents are usually entitled for an amount of about $10,630 per child. To claim this financial support, the adoptive parents are required to file Form 8839 with either form 1040 or Form 1040A. Adopters must also maintain records to back up any credit claimed.
On the most basic, the Adoption Tax Credit is an amount subtracted from your tax liability. It was developed and made available for adopting families for the year following the year in which the expenses are paid. So it then follows that the taxpayer who paid the qualifying overheads in the current year for certain adoption purposes may then be entitled to claim the adoption tax credit on the current year return. It is important, however, to note that the adoption tax credit is not considered available for any of the refunded costs.
What the Adoption Tax Credit Covers?
To fully understand the nature of the Adoption Tax Credit law, it is wise to know what this financial aid covers and how it works with the other incentives like the most known benefits for employer-paid adoption. Note and understand the following:
* In general, the adoption tax credit applies to both domestic and international adoptions. However, the procedure involved in these two main forms of adoption largely differs. On one hand, the adoption tax credit for the international adoptions can be claimed only after the adoption has been finalized. On the other hand, the adoption tax credit for domestic adoptions can be claimed regardless of the fact that the adoption does not go through the finalization process.
* The adoption tax credit law mandates that the amount of about $10,630 is applicable per child, but not per year. This means that even if the taxpayer claims costs paid out over more than a year for a particular adoption, the total credit that he or she is entitled remains $10,630.
* The adoption tax credit law highlights the availability of full credit. However, the full credit is not available for international adoptions. It is only entitled for the domestic special needs adoption even if the qualifying overheads failed to reach that limit.
Qualification of Adoption Expenses and Eligibility of Children
To be able to claim the adoption tax credit, the adoptee should make his or her expenses qualified for the credit. Under the tax code, it is defined that the qualified expenses are those that are reasonable and necessary, as well as those that are associated directly to the legal adoption of an eligible child. This mainly includes the attorney fees, court costs, and the traveling overheads.
Speaking of eligible children, the adoption tax credit law holds that children who are eligible to the credit are those that are under the age of 18, or those who are mentally and physically incapable of caring for themselves. Aside from this, there are certain adoption tax credit rules available for children who have special needs, or those who are US citizens or residents, who cannot be returned to their parents’ residence, and those who are probably will not be available for adoption with the absence of assistance due to certain conditions or factors.
Government Adoption Subsidies
A lot of federal and state adoption financing resources is finally out there to help you support your adoption. These adoption aids are generally made available to make sure that those couples or families who adopt have the most crucial financing resources to meet their adoption needs. The subsidies are also available for the adopted children, regardless of whether the home study was done by a private or public agency. It is important, however, to note that these subsidies vary by state or region. So it is best to do a research on what is really available in your area before you decide on one particular government subsidy.
Adoption Loans and Grants
Adoption loans and grants are but another great adoption financing resources to consider. Finding this form of financial aid is just so easy with lots of organizations out there offering adoption grants and loans to the eligible adoptive families. Well, as one of the most worth taking adoption financing resources, the grants and loans can help defray some of the adoption expenses. So if you are really serious with your adoption plans, then why don't you consider filing for adoption loans and grants?
Where to Find Adoption Grants
Many families thinking for adoption have backed out in their adoption plans for one particular reason - adoption costs a lot and they cannot afford to pay the charges. Thanks, however, to some organizations out there that adoption grants were considered and offered to support couples and families who wish to adopt.
The adoption grants are basically a form of finance aid commonly offered by all states to assist couples and parents who wish to adopt and manage living with their adopted children. Most of the adoption grants are available for domestic adoptions only, but there are some that offer grants for international adoption purposes. Those who usually handle adoption grants internationally are private sectors of the society.
Now, if you happen to be one of those thousands of people out there planning for adoption, but is bothered by financial constraints, then considering adoption grants could no doubt be the right move for you to take. You can find these financial aids anywhere on earth as almost a hundred organizations today are offering this. However, it is very important to note and understand first the terms and conditions maintained by these grants as there are some that are restricted to certain types of children or adoptions.
There are also others that are only available to any prospective parents who are able to meet with the criteria set by the organization they are dealing with. So, make sure you know the adoption grants’ coverage, limitations and requirements.
Below is a short list of some of the organizations offering adoption grants for those who wish to adopt and support their adopted child. Consider the following:
Acres of Hope, Inc.
The Acres of Hope, Inc. is one of the most recognized non-profit charitable foundations that are dedicated to providing educational information and parent to parent support to families and couples dealing with children of emotional and physical challenges. This organization also offers emotional support, advocacy services, loan program, and financial assistance for such kind of families. As a grant organization, Acres of Hope, Inc. seeks to promote greater community acceptance, understanding and support for families considering adoption. They now offer adoption grants and other financial aids to make that mission possible.
National Adoption Foundation
The National Adoption Foundation currently offers programs for adoption grants, although limited. Aside from this, they also offers unsecured loans through a revolving $9 million loan bank for those who are thinking or planning for adopting a child, but can't afford to support the adoption process and the costs.
The International Adoption Center
The International Adoption Center is but another organization that provides adoption grants to those families that qualify for the adoption process. As far as I know, they offer adoption grants of up to $1,000 per couple. However, for families or couples to avail this offer, they need to write a letter stating the nature of the financial need. This letter must be submitted to the organization itself, along with the supporting documents that can be considered for the decision making.
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