adoption tax credit

Adoption: How Much Does It Cost?

Overwhelmed by the costs of adoption? It may not be quite what you think…

Individuals and couples wishing to have a child but unable to do so naturally typically have two options: adoption or assisted reproduction (ART).  Both options are relatively comparable in cost, with the average price of a domestic adoption in the United States ranging from $20,000-$45,000 and a donor egg pregnancy via in vitro fertilization priced between $20,000-$35,000.  If, however, you require a donor embryo, the cost could be $7,500-$20,000, and gestational carrier/surrogacy can drive the cost from $50,000 to over $100,000.

Assuming, however, you are looking simply at the comparable donor egg option, one important thing to keep in mind is that adoption, unlike assisted reproduction, offers a federal tax credit and many employers offer credits as well.  For a couple with combined annual incomes of less than $180,000, the federal adoption credit could be up to $13,190.  Employer tax credits typically range from $2,000-$5,000 and are offered by companies like SAS, CISCO, IBM, the United States Department of Defense and many others.

I encourage clients to determine first how much these credits will offset their cost of adoption to determine their ‘bottom-line’ cost.

So now that you have done your cost analysis, how do you afford your ‘bottom-line’?  Most adoptive families are middle-income and are able to work out the costs over time.  Options for financing an adoption include:

  • Borrowing against home equity, allowing a deduction while waiting for the tax credit;
  • Borrowing against a retirement or 401K plan
  • Grants and adoption assistance programs through public and private organizations;
  • Asking family members and relatives to assist with cost

Where there’s a will, there’s a way!

E. Parker Herring is a Board Certified Family Law Specialist and managing partner of Herring & Mills, PLLC, a Raleigh family law firm.  Herring is also director of A Child’s Hope, a North Carolina licensed adoption agency.

Do you have a story you’d like to tell?  Email us at blog.ach@foryourlife.com.  Visit us at www.AChildsHope.com, or call our Birth Mother Hotline at 1-877-890-HOPE (4976) so one of our adoption counselors can answer your questions confidentially.

Please remember that this is a public site open to anyone; therefore, anything you post can be seen by anyone.

What is the adoption tax credit?

Congress recently passed a bill to avert the “fiscal cliff,” with the bill signed on January 2, 2013. The bill made the adoption tax credit permanent. However, it is not refundable. This has many adoptive parents asking questions like, what is the adoption tax credit, who’s eligible and what does it mean that the adoption tax credit is permanent?

To view this entire article and all of it’s adoption tax credit FAQ’s go to: http://adoptiontaxcredit.org/faqs/

Do you have a story you’d like to tell?  Email us at blog.ach@foryourlife.com.  Visit us at www.AChildsHope.com, or call our Birth Mother Hotline at 1-877-890-HOPE (4976) so one of our adoption counselors can answer your questions confidentially.

Please remember that this is a public site open to anyone; therefore, anything you post can be seen by anyone.

Birthmother Hotline: (877) 890-4673

Envia Un Texto: (919) 218-6270

Text: Pregnant to (919) 971-4396