Paying for Your Adoption
“How much does adoption cost?” is one of the questions we hear most frequently from families who come to Carolina Adoption Services. Adoption costs vary, but it is not something you have to shoulder alone. Families have several options when it comes to financing and funding their adoption. In our four-part Paying for Your Adoption series, learn about key sources in helping to cover your adoption costs.
Adoption Tax Credits
Federal Adoption Tax Credit
The tax credit is a dollar-for-dollar reduction in the amount of federal taxes owed for the year of filing. File for this credit after your adoption has been finalized. For 2020 adoptions, qualified families are eligible up to $14,300 dollars per child.
Expenses that qualify towards your adoption tax credit include:
- Reasonable and necessary adoption fees
- Court costs
- Attorney fees
- Adoption travel expenses
Adoption Tax Credit FAQs from NACAC
Topic No. 607 from the IRS website
State Tax Credit
In many states, qualifying for a federal adoption tax credit is the first step toward qualifying for a state-level adoption tax credit. Like a federal income tax credit, a state income tax credit is a dollar-for-dollar reduction in your state income tax obligation. Your state’s tax department office or tax department website is a primary source for current information about state adoption tax credits.
State Adoption Assistance Programs from NACAC
This page is for informational purposes only. Please consult your accountant or CPA to discuss how you can benefit from federal and state adoption tax credits.