Christina Pomoni asked:




The decision to adopt is one of the most exciting moments in one’s life. Yet, financing an adoption is an overwhelming stress for most adoptive families. The costs involved in the adoption process can be devastating, and prospective adoptive parents may get discouraged.

The Adoption Tax Credit is one of the valuable funding options available to prospective adoptive families, but also one of the most intricate tax law provisions. Received by the Internal Revenue Service (IRS), the Adoption Tax Credit asserts that the adoption expenses are subtracted against the yearly tax liability. However, adoptive families need to learn what the tax credit covers, what the directly related adoption expenses are, who qualifies, and how the provision works.

The tax credit is applicable both to domestic and international adoptions. For a domestic adoption, adoptive families can claim the credit regardless if the adoption process is not finalized. Instead, for an international adoption, adoptive families cannot apply for the credit until the adoption process is finalized. In case the adoption process of an international adoption is interrupted, families may claim the adoption expenses to the maximum amount that may be credited on a second adoption.

Eligibility requirements of the adoption tax credit require that adoptive families have adopted an eligible child and that they have paid qualified expenses on their own. The tax credit defines as eligible any child younger than 17 or any child who is US citizen, or resident alien, mentally and physically incapable of taking care of oneself.

If the adopted child is a US citizen or resident alien, adoptive parents collect the credit for qualified expenses based on when the adoption was finalized. For example, for expenses paid before the adoption is finalized, tax credit is collected the next year; for expenses  paid the same year that the adoption is finalized, tax credit is collected the same year; for expenses paid after the adoption is finalized, tax credit is paid the year the expenses are made.

If the adopted child is a foreigner, adoptive parents collect the credit for qualified expenses the same year that the adoption is finalized. Also, for any expenses made after the finalization of the adoption, adoptive families are eligible for collecting tax credit the same year that they made the expenses.

The IRS (Publication 968) defines as directly related adoption expenses the adoption fees, legal fees, transportation fees, meals, and accommodation expenses provided they are all “reasonable and necessary.” Prospective adoptive parents should revise the IRS guidelines very carefully with a tax expert so that they are sure about the expenses they are eligible to claim. For example, expenses related to surrogate families are not included in the qualified expenses for the tax credit. Also, expenses that are already reimbursed by private programs such as employee benefits are not qualified either.

Currently, the States of Arizona, California, Idaho, Iowa, Kansas, Maryland, Massachusetts, Michigan, Missouri, New Mexico, North Dakota, Oklahoma, Utah, West Virginia and Wisconsin exercise the Adoption Tax Credit providing a full credit of $12,150 for offsetting adoption expenses. Adoptive families that have been reimbursed by the tax credit provision consider that is more valuable than plain tax reduction because qualified adoption expenses are subtracted on a dollar to dollar basis. Hence, if someone has a tax liability of $8,000 and has incurred adoption expenses of $5,000, tax liability will be reduced to $3,000. In case the tax liability is lesser amount than the tax credit, the difference is carried forward for up to five years.

Generally, prospective adoptive parents should consult tax experts in order to clarify their eligibility, to investigate if their State offers the Adoption Tax Credit, and overall, to ensure that all their claims are appropriately filed.

Christina Pomoni asked:




Although it seems harsh and selfish to give up on a child, there are times that placing parents do not really have any option. Unexpected pregnancy is nothing new. It has happened before and it still happens. However, regardless of the reasons that a parent would decide to place a child for adoption, adopting has to be an intentional decision.

Depending on the requirements of the parties involved, parents choose to have a closed or an open adoption. Often, there is confusion between the two types, but a good pregnancy counselor can definitely help parents out on deciding the better adoption type for their child. 

Closed Adoptions

Closed adoptions were common practice for many years, but today they are rare. In closed adoptions, placing parents do not come to contact with adoptive parents prior to or after the placement of the child. As the process is being completed through the adopting agency, birth parents and adoptive parents have little or no information on one another.

In closed adoptions, the prospective adoptive parents put their name on a list waiting for the adopting agency to find a match with a birth family. Although they provide information on where they live, what work they do, what are their hobbies, what is their daily routine, they do not get to know the placing parents. Hence, they do not know where their child-to-be comes from, or the background of the birth family.

Typically, in closed adoptions, the adopting files are sealed and adoptive parents and birth parents get to meet for the first time at the time of the adoption. However, they breech any contact after the adoption process is completed. The child doesn’t get to know the birth parents before turning 18, or may even never find out, unless told, that he or she came into the family through adoption. Also, in many cases, adopting records may have endured changes from the original records thus making it difficult, if only impossible, for the child to find his or her birth parents.

Closed adoptions are very common when international adoptions are on schedule. 

Open Adoptions

Unlike closed adoptions, open adoptions are very commonly preferred. In open adoptions, placing parents agree to exchange phone calls, visits, letters and contact information with adoptive parents without requiring the adopting agency to play the role of the intermediary. In fact, open adoptions begin as semi-open adoptions where birth parents go over multiple profiles of adoptive families and derive valuable information on each one of them.

Once the adoptive parents have been selected, both parties come to contact with one another.  Some birth parents choose to have contact with adoptive parents prior to and after the placement of the child. Also, in many cases, it is agreed that the placing parents would pay periodic visits as the child grows older.

Typically, in open adoptions, the adopting records are not sealed and hence, any name changes or other changes can be easily documented. This makes it easier for the child to find out the biological parents. 

Which one is the best?

In general, both closed and open adoptions have disadvantages. In regards to closed adoptions, birth parents may experience feelings of guilt for placing their child for adoption. In many cases, birth parents develop an attitude of denial when it comes to the child they have placed for adoption as a result of not having any contact with the child after the adoption has taken place. On the other hand, adoptive parents may experience feelings of fear related to a possible change of mind from the birth mother, who may want her child back. Also, many adoptive parents fear the lack of medical record for the child as they cannot know what the case is if the child develops any disease.

Similarly, open adoptions have disadvantages. In many cases, birth parents, being able to observe how their child is being brought up, may experience disappointment if the adoptive parents do not meet their expectations. Also, conflicts may arise as a result of cultural and/or religious traditions. On the other hand, adoptive parents may develop feelings of uncertainty feeling that their parenting role is being put at stake.

In order to decide which type of abortion suits best to the parents’ needs, adopting has to be an unselfish decision. Birth parents should always and foremost consider the best for the child without prejudices. Similarly, adoptive parents should realize how important is their decision to bring up a child who is not theirs. In the context of an open abortion, proper communication between the two sides will only ensure that the child will grow up in a structured environment with the love of birth parents and adoptive parents.