The costs related to adoption vary, but in most cases, the amount of money necessary to pursue adoption is substantial to most people. The costs of adoption include agency and legal fees, potential birth mother support such as medical fees, and other adoption-related expenses such as obtaining a home study.

The good news is there are a number of financial resources that you may be able to leverage through the adoption process to help manage and navigate the expenses more easily. The following is a list and brief description of financial resources that may want to explore.

Employee Benefits:

It is quite possible that your employer includes some type of reimbursement for some of the adoption-related expenses. Reimbursement benefits typically range from $2,000 to $10,000 for direct adoption expenses. The policies may vary on what qualifies for a direct adoption expense.

If you not sure if your company offers adoption benefits, check with your human resources department. It is possible that your inquiry may lead to the company investigating and potentially adding that benefit if they do not already have it.

Federal Tax Credit:

The federal tax credit for adoption (S.148 & H.R. 622) was included in the Tax Reconciliation Bill (H.R. 1836) and passed on May 26, 2001. This law signed by President Bush includes the following benefits:

  • The tax credit was made permanent
  • Increased the amount of credit from $5,000 to $10,000
  • Income limitations were adjusted allowing incomes under $150,000 to receive full credit and adjusted credits graduating down to zero at incomes of $190,000 or more.
  • The maximum amount of credit will be adjusted to match inflation
  • Eliminated the need for families who adopt special needs children to show expenses

For additional information contact the Internal Revenue Service at or call 1-800-829-3676 and request information on the Adoption Tax Credit and Tax Exclusion from publication 968.

State Tax Credit:

Contact your state’s adoption specialist to inquire whether or not your state provides a tax credit if you adopt a child from a public adoption agency.  This is only a possibility with states that have state income taxes.

Military Benefits:

In most cases, the U.S. military will reimburse up to $2,000 per child for related one-time adoption costs. This reimbursement is for active-duty personnel and the reimbursement is available whether you are adopting from within the U.S. or internationally. The adoption must take place through a state adoption agency or a private non-profit agency. The $2,000 reimbursement will be made once the adoption is finalized.

Dependency Exemption:

Although this is not an adoption-specific benefit, as adoptive parents you qualify for taking the same dependency exemption on your income taxes as other parents. You are qualified for the dependency exemption even if the adoption has not yet been finalized.

Adoption Loans:

Some life insurance policies, banks, and credit unions are avenues you can pursue potential loans when you are seeking to adopt. If you use the loan route, it is important to put a plan in place for paying back the loan as quickly as possible. Some couples, who use loans in their adoption, pay them off with tax credit monies or from employer reimbursement monies after the adoption is finalized.

Private Grants:

There may be a private grant opportunity that you may qualify for when pursuing adoption. The grant monies may be available for families that are more socio-economically challenged or to encourage families to adopt special needs children. Contact the National Adoption Foundation at (203) 791-3811 for more information.

Crowd Funding:

Turning to crowdfund platforms such as GoFundMe has become a popular way for prospective parents and families to share their adoption journey with family and friends.  Along with personal insights into the couple’s dreams to adopt, it provides an avenue for friends and family members to come alongside and help alleviate some of the financial burden associated with the costs to adopt.