Questions & Answers
When looking into methods to fund your adoption, you’ll find you have a lot of questions. We have covered some of the most frequently-asked adoption financing questions below. If you have a question that’s not covered here, please consult with your Adoption Coordinator.
After several years of fertility treatment costing lots of money, my wife and I have decided to adopt. We want to get started right away. Should we take out a loan for adoption?
If you’re already having trouble making your car or house payment or paying on credit cards, try to get these expenses under control. Then you might consider a loan. But don’t borrow money to adopt if you’re adding to a budget already stretched thin.
With a child, you’ll have medical expenses, childcare, preschool, the cost of food, clothing and toys. Making the loan payment every month in addition to taking on the expense of the child may be too much to handle.
We’ve recommended family members take two jobs for a while. With the extra money, they have paid off their debts and saved up for the adoption. But when your child comes, he or she will need you at home. Then you can’t be working two jobs, exhausted all the time and trying to enjoy life with your child.
We have childless couples tell us they’re going to put off adopting until they pay off an expensive car. They are wasting precious time they could spend with a child. If they really want to build a family, they should sell the car!
How can we make adoption affordable?
Many families experience sticker shock after looking into adoption and stop right there. Yet many people make monthly payments for a car or even a home remodel. Your car may only last ten years, but your family is for a lifetime! Your first step in affording adoption may be re-prioritizing your current expenses.
You should ask your employer or human resources department about any adoption benefits that may be available. Many employers are now including this as part of their benefit packages. Similarly, consult your health insurance carrier. Some insurance allows a one-time infertility or adoption benefit that may be available for you.
Learn about the federal adoption tax credit and any state tax credit available for you. This may be the best way to reimburse some of your adoption expenses. Talk to your CPA or tax preparer if you have additional questions.
There may be adoption grants out there, but be aware there are many more applicants than there are grants. Time spent completing applications may be better used pursuing funds directly for your adoption, such as garage sales, online auctions, or a second job.
Does the Military offer special funds for adoption?
Yes. Active duty service members in the Armed Services and the US Coast Guard can receive up to $2,000 reimbursement for qualifying expenses. Contact your branch of the military for more information concerning reimbursement, as well as, the granting of leave for adopting service members.
Learn more at MilitaryFamily.Org
Should I get a Tax Payer Identification Number for my baby?
You will need a Tax Payer Identification Number for your baby before the adoption finalizes in order to apply for tax credits and exemptions, such as the Adoption Tax Credit or a dependency exemption on your taxes.
Should I apply for a Social Security Number for my baby?
No. The Social Security Administration advises families to wait until your adoption finalizes to apply for a Social Security Number. That way you can apply using the child’s new name (if necessary) and listing you as the parents.
How do I apply for a Tax Payer Identification Number?
You just need to fill out Internal Revenue Service Form W-7A Application for a Tax Payer Identification Number for Pending U.S. Adoptions. Click here to download the form.
How long is the Tax Payer Identification Number valid for?
It is valid for two years. The IRS will notify you six months before it expires. At the time, you can apply for a Social Security Number or file for an extension of the Tax Payer Identification Number if the adoption has not yet finalized.
Can I continue to use the Tax Payer ID Number after the adoption finalizes?
No. After the adoption is final, do not continue using the Tax Payer Identification Number. Instead, you must use a Social Security Number. To apply for a Social Security Number for your child, fill in Form SS-5, Application for a Social Security Card, and return it, with the appropriate evidence documents, to the Social Security Administration (SSA). You can get Form SS-5 online, from your local SSA office, or by calling the SSA at 1-800-772-1213. It usually takes about two weeks to get a Social Security Number once the SSA has all the evidence and information it needs.
Are there grants available for families who are wanting to adopt but can’t afford to?
Yes, there are some grants available, but they are extremely limited in nature. There are far more families applying than there are funds available.
The best advice I can give to families who are hoping to secure grant funds is to instead research the tax credit, employer benefits, and ways they can raise money for their own adoption.
One grant that is consistently available to qualified parents is the African American Enrichment Grant through Lifetime Adoption Foundation. Currently it is offering grants of over $4,000 to qualified families. Click here for more information.
We just want to provide a loving, Christian home for a child in need. Why does it have to cost so much?
As with fertility treatments or other services, there are costs to adoption. We don’t go into a doctor and suggest that they should care for people only out of kindness; we understand that they must cover the costs of the care they provide. Those who provide adoption services must also pay for electricity, phones, computers, employees, and a location.
Even free or low-cost adoptions are not free. They are paid for by millions of tax dollars. Right now, as government services are cash-strapped, many subsidized-agencies are not providing the services that women and children need in many parts of the country. Private adoption organizations and some non-profit organizations are stepping in to provide care that these people so desperately need.
If cost is a factor, consider private or independent adoptions where you can hand-select the professionals you use to keep costs lower. You need to only employ the professionals and services that you need, rather than selecting a full-service organization that may include services you won’t need.
