What is Adoption Assistance?

Adoption Assistance is a program for families who adopt special needs children or hard-to-place children. The adoption assistance program offers a stipend to offset the expenses related to adoption and child-rearing.

Adoption Assistance may include such benefits as monthly cash payments, reimbursement of adoption-related expenses, medical assistance, and counseling services. Eligibility requirements and the benefits available to you depend on the state or country where you adopt.

Adoption Assistance strives to ensure that each child in need of permanence can be placed with a supportive, loving family, regardless of their challenges or needs. This program does not apply to all adoptions, and families should research it carefully before starting the adoption process.

Is Adoption Assistance Taxable?

Determining the Taxability of Adoption Assistance: adopting-intl.com/How one treats adoption assistance benefits for tax purposes is determined based on both the kind of benefits involved and where those benefits came from.

If Adoption Assistance is provided through a public agency or any of the qualified nonprofit organizations, all eligible benefits are generally tax-free in the United States. Cash payments, payment or reimbursement of adoption expenses, and any medical or counseling services provided under the Adoption Assistance program are counted towards your $5,000 per child eligibility amount.

Adoption Assistance benefits may, however, receive different tax treatment if an employer provides them. Adoption Assistance benefits offered by an employer are generally taxable income to the employee and must be reported on the employee’s tax return.

How Long Does Adoption Assistance Last?

The length of the time they receive Adoption Assistance benefits will change based on where in your country (or what country) you are adopting and how special needs each child has.

Adoption Assistance benefits are available until a child turns 18 or, in some states, until he/she turns 21 if the child has ongoing special needs. States earn exceptions to these age limits through college or vocational training.

Also, See: Non-Cash Compensation