Adoption Assistance &
Financial Support

Most, though not all, of the children in the foster care system are eligible for benefits under this program. Other government assistance (i.e., state-funded adoption assistance) may be available for children in the foster care system who do not qualify for Title IV-E benefits.

• Adoption assistance is a resource to help adoptive parents meet the demands of caring for the special needs of a child adopted from foster care. This agreement may or may not include the following components: a monthly cash stipend, Medicaid, or access to other supportive services.
• Most financial assistance is based on the needs of the adopted child, regardless of the family’s financial resources, though those resources will be considered when determining the amount of assistance to be provided.
• Many children waiting in foster care are eligible for financial assistance.
• Assistance may be short-term or may last until the adopted child reaches maturity (age 18 or 21, depending on the state’s requirements).
• Adoption assistance can come from local, state, or federal funds.
• An adopting family must apply for adoption assistance through their county or private agency social worker.
• All adoption assistance agreements must be signed before the adoption is finalized.
• Obtaining adoption assistance after finalization is very difficult, though it is possible to request assistance retroactively. Adoptive parents can appeal a negative decision.

A one-time reimbursement of non-recurring expenses for the adoption of children in foster care who meet the state’s eligibility criteria may be available. In cases where siblings are placed and adopted, either separately or together, each child is treated as an individual and reimbursement of non-recurring expenses is allowable for each child, up to the state’s maximum amount. Qualifying expenses may include costs to have the family assessment (home study) completed, costs for undergoing physical health and psychological examinations, court fees, and attorney fees. Reasonable costs for transportation, food, and lodging for the child and/or the adoptive parent(s), when necessary to complete the placement or adoption process, may also be included.

For an adoptive family to be eligible for reimbursement, the state must have determined that:

• the child should not or cannot be returned to the home of the birth parent(s).
• there exists a specific factor or condition—such as age, membership in a sibling group, or the presence of physical, mental, or emotional challenges—that makes it reasonable to conclude that the child cannot be placed with adoptive parent(s) without providing adoption assistance.

There are several rules which govern adoption assistance / subsidy agreements.

• The amount of the subsidy is to be determined by the adopting parent(s) and the state agency.
• The agreement must indicate the nature and amount of expenses to be paid.
• There must be no income eligibility requirement for the adopting parent(s) to qualify for payment.
• Reimbursement will not be paid if expenses are reimbursed through another source, such as adoption benefits you receive from your employer.
• The agreement must be signed prior to the final decree of adoption.

Since 2003, families who adopted a child with special needs from foster care could claim a federal adoption tax credit. Children who receive adoption assistance/subsidy benefits are considered children with special needs.

For adoptions finalized in 2020, there is a federal adoption tax credit of up to $14,300 per child. The 2020 adoption tax credit is not refundable, which means taxpayers can only use the credit if they have a federal income tax liability. The credit applies one time for each adopted child and should be claimed when taxpayers file taxes for 2020. For more information about the adoption tax credit, visit the IRS website.

Check with your employer to see what benefits they offer for adoptive families.

Explore the National Military Family Association’s website to learn about the benefits and supports available to military families who adopt.

Various foundations establish grants to help defray the cost of adoption. You can also talk to your banker or credit union about loan options. Visit the National Adoption Foundation’s website for information about their grants and loans.

Lastly, a good place to read and learn about the costs of all types of adoption and resources available to support these expenses is Planning for Adoption: Knowing the Costs and Resources.