Spence-Chapin's Adoption Services

Spence-Chapin is a not-for-profit agency dedicated to providing high quality services to children, birth parents and adoptive parents. The actual cost of providing services far exceeds revenue from fees. Fees received from adoptive parents cover less than 30% of the professional services provided by Spence-Chapin. Since we do not receive government funding, we rely on fund raising, donations and endowments to keep adoption fees affordable for our clients. Spence-Chapin has a sliding-scale fee based on the applicant's income, for both domestic and international adoptions.

Spence-Chapin's service fee is spelled out in the beginning and is comprehensive. It includes, among other services:

• Assignment of a personal social worker
• Home study and post-placement services
• Educational workshops to help prepare for adoptive parenthood
• Assistance from document preparation specialists
• Birth parent expenses covered for domestic adoptions
• Free counseling for a year from our SPARK child development experts
• Participation in a well-baby care workshop and a SPARK developmental playshop
• Support for humanitarian aid program

Federal Adoption Tax Credit and Income Exclusion

On their federal income tax return, adoptive parents may be able to claim a tax credit for qualified adoption expenses and/or an income exclusion for employer-provided adoption assistance for qualified adoption expenses for both domestic and international adoption.

Following is a summary of currently available information. Parents should contact a tax professional to review the IRS guidelines in order to understand the impact of the new adoption tax credit and income exclusion provisions on their own situation.

• A tax credit is typically more valuable than a tax deduction because qualified expenses are subtracted dollar for dollar against your tax liability. For example, if you owe $5,000 in federal taxes and have $3,000 in qualified adoption expenses, your tax bill is reduced to $2,000. If your tax bill is smaller than the credit, the unused portion of the credit may be carried forward for up to five years.
  
  
• Qualified expenses include "reasonable and necessary" adoption fees, attorney fees, and some travel costs, including necessary transportation, meals and lodging. The credit does not apply to expenses reimbursed by the government or private programs for which an income-tax deduction or credit already is allowed.

Federal Tax Credit for Adoption Expenses

For tax year 2007, the maximum credit for qualified expenses of a legal adoption is $11,390. In the case of a special needs adoption, the maximum credit is also $11,390 and is applied regardless of any qualified expenses.

Income Limits:
The limits on the amount of income adoptive parents may earn in order to take advantage of this credit are as follows; the entire credit is available to families whose modified adjusted gross income is $170,820 or less. The credit begins to phase down for families with modified adjusted gross income of $170,820, and is completely phased out at $210,820 or more. If a family’s modified adjusted gross income is $210,820 or more, they cannot take advantage of the credit.

Differences in Types of Adoptions

• Adoption of children from the United States (without special needs): parents may take a $11,390 credit for qualified adoption expenses. The expenses may be taken in the year in which they are incurred or paid.
  
  
• Adoption of children from other countries: parents may take a $11,390 credit for qualified adoption expenses after the adoption is final.
  
  
• Adoption of special needs children: parents may take a flat $11,390 credit without documenting the expenses. To be deemed a special needs child by the IRS, the child must be born in the United States; a state must have determined that the child cannot or should not be returned to his parent's home and that the child probably will not be adopted unless some assistance is provided to the adoptive parents; and the adoption must be final.
  
  Note: A child placed by Spence-Chapin whom Spence-Chapin considers to have special needs might not meet the IRS definition of special needs.

Federal Income Exclusion for Employer-provided Assistance:
The exclusion allowed for employer-provided assistance is $11,390 per child. You can claim both an exclusion and a credit for the same adoption, but not for the same expenses.

Employee Benefits Programs

Many companies offer some type of adoption benefits to their "regular" employees. These benefits, depending on your company, may include:

• Direct reimbursement of up to $11,390 upon placement
• Paid leave — in addition to vacation time, sick leave, or personal days
• Unpaid leave — personal, medical or child care
• Adoption seminars and classes, as well as counseling and support

Even if your employer does not currently offer adoption benefits, ask about their availability. You may be able to convince your company to begin offering them. Your employer may also have an Employee Assistance Program (EAP). This benefit helps employees deal with unusual personal situations or problems.

Spence-Chapin Special Funds

The African-American Adoptionship Fund, created in 1993, has helped to place over 100 babies and toddlers in loving families. Adoptionships were established by the Spence-Chapin African-American Adoptive Parents Advisory Committee to assist families who have unusual expenses or circumstances. Qualifying parents may receive a fee reduction or waiver through this fund and are welcome to discuss the details with their social worker.

Similarly, the International Adoptionship Fund was started in 1999 to aid prospective families facing unusual financial constraints and those adopting older or special needs children. Prospective parents can discuss the program with their social worker.

Spence-Chapin's ASAP (special needs adoption) program strives to place infants with families who are prepared to meet complex and often severe health needs. Its New York City Welcome Fund defrays expenses incurred by qualifying applicants who must travel from outside the metropolitan area to New York to meet their ASAP baby.

State Adoption Subsidy Assistance

Infants diagnosed with specific medical conditions are eligible for State Adoption Subsidy Assistance. Under New York and New Jersey state laws, an application for subsidy can be submitted at the time of diagnosis. Application is generally made at the time of placement, although assistance can be accessed following finalization, if the family had not been aware of the presence or severity of the disability. Spence-Chapin will help apply for this assistance whenever a child may be eligible.

Federal Family and Medical Leave Act

Unpaid leave under the federal Family and Medical Leave Act can be an option. This act allows individuals to take up to 12 weeks unpaid leave with certain benefits, without jeopardizing employment. This is not exclusive to an adoption benefit since it is available for anyone who works for a company with 50 or more employees. However, it can provide valuable time for a new mother or father.

Loans

While it’s far from ideal to borrow money, preadoptive families may find a loan necessary. Possible loan sources include bank loans, private grants or special loan programs.

Chase New Additions has partnered with the Dave Thomas Foundation for Adoption to help finance adoptions. The Chase New Additions program is a home equity line of credit specifically designed with the needs of prospective families in mind. For more information: www.chase.com/newadditions or 1-866-345-7687.

The National Adoption Foundation provides financial assistance, services and support to families, before, during and after their adoptions are finalized. The Foundation's programs are available to any family whether they are adopting an infant, a child from abroad or a child from foster care. Grants and loans are available. For more information, visit www.nafadopt.org.