5 Broadview Street  Acton, MA  01720
978-263-5400 (phone)
1-877-652-6678 (toll-free for birthparents)
978-266-1909 (fax)
karen@bright-futures.org

About Bright Futures:
Adoption Financial Assistance

The following information may help you as you prepare to meet the costs of adopting a child. Please feel free to contact Bright Futures should you have any questions, concerns of comments about this information.

The National Adoption Foundation
Adoption Tax Credit
Employer Benefits
Military Reimbursement
Adoption Air Fares
Insurance Benefits For The Adopted Child
Adoption Cancellation Insurance
Back to Fees and Services

The National Adoption Foundation

This foundation provides financial assistance to qualified prospective adoptive parents.  They have a number of programs, including grants, unsecured loans and home equity loans through MBNA AMERICA.  For grants, a comprehensive financial assistance application is submitted and the Board of Directors makes a decision the last week of each quarter of the calendar year.  For more information, please call 203-791-3811. top

Adoption Tax Credit --

This Credit has increased significantly. Check back later for all the details.

Effective in January, 1997 was a $5000 per child income tax credit for qualifying expenses.  Qualifying expenses include court costs, adoption fees, and other expenses directly related to the legal adoption of an eligible child.  A tax credit is subtracted from your tax liability which means you may get a tax refund.  The full $5000 tax credit is available to families whose adjusted gross income is less that $75,000.  For families whose adjusted gross income is more than $75,000, the credit is reduced.  Your adoption expenses must be incurred between January 1997 and December 2001.  After December 2001, the adoption credit will only apply to the adoption of a child with special needs.  For more information, please contact the Internal Revenue Service (IRS) at 1-800-TAX-FORM and request Publication 968 or visit their website at http://www.irs.ustreas.gov.
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Employer Benefits

Many employers provide adoption assistance through reimbursement of certain expenses.  Check with your employer’s human resources/benefits department to determine what adoption benefits are available to you.  This employer benefit may be non-taxable if your income is below $75,000.  For additional taxation information, contact the Internal Revenue Service (IRS) at 1-800-TAX-FORM and request Publication 968 or visit their website at http://www.irs.ustreas.gov.  For more information about employer benefits see also http://www.calib.com/naic/factsheets/benefits.htm.
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A number of lending institutions provide loans to families to offset adoption expenses.  Local banks and credit union options include revolving credit lines, home equity loans, and car refinancing.  Also, review your retirement or life insurance policies to see if you can take a loan or withdrawal against the balance.  Be sure to check with your accountant on the tax implications of such a loan or refinancing.  top

Military Reimbursement

Through P.L. 102-290, active duty members of the military are eligible for up to $2000 in qualifying expenses in a year for the adoption of a child.  If multiple children are adopted, the maximum reimbursement increases to $5000 per year.  Qualifying expenses include legal fees, agency fees, placement fees, and certain medical expenses. To qualify, you must be serving continuous active duty for at least 180 days.  Adoptions must be arranged by a qualifying adoption agency.  To receive this benefit, register with the finance office of your local military installation after placement of your child. Submit your request for reimbursement within one year of finalizing the adoption.  For more information, go to http://www.nmfa.org/adoption.html.
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Adoption Air Fares

An Adoption Air Fare program has been put together by The Preston Group, an established travel agency in Salt Lake City, Utah. They specialize in saving money for last minute travel arrangements that normally can be very costly. Just mention it is for adoption related matters. Ask for Curt Smith at 1(800) FLY-4KIDS (359-4543). top

Laws have mandated that all insurance companies offer and provide dependent benefits to a child being adopted by the policy subscriber. This coverage usually takes place upon birth of a newborn. Check with your medical insurance representative to understand how such benefits work. top

Adoption Cancellation Insurance

Adoption cancellation insurance is available to adoptive couples arranging an independent adoption. The insurance is provided by Kemper Insurance through MBO Insurance, in Palo Alto, California at (800) 833-7337 and must be approved by their approved list of attorneys. The rates are $750 for $5,000 in coverage and scales up to $1,950 for $30,000 in coverage.  The insurance only covers birth parent expenses paid before the adoption becomes final in the situation where the birth parent(s) change their mind.  The insurance does not include any fees for any intermediaries or legal services.

According to MBO insurance: As a statistical average, for every 100 policies they have issued, they have paid claims because:

• 14 birthmothers changed their mind before going to the hospital.
• 3 birthmothers changed their mind while they were in the hospital.
• 2 birthmothers change their mind after they had granted custody.
• 3 birthfathers have reclaimed, out of 1,250 policies issued.

Split of Expenses:

• 64% living expenses,
• 10% medical costs,
• 5% travel, and
• 21% legal.

Advice from the adjuster who actually handles these claims: