Home / Blog / National Adoption Awareness Month 2019 | Adoption Tax Credit

National Adoption Awareness Month 2019 | Adoption Tax Credit

Name: Core Documents
Brand: Core Documents
Rating: 4.9 (2549 reviews)

November is National Adoption Awareness Month and the Saturday before Thanksgiving is National Adoption Day, a nationwide community event intent on raising awareness of the 117,000+ children in foster care awaiting adoption. On that one day in 2017, about 5,000 children were adopted by loving, permanent families.

Employer adoption assistance and adoption tax credit work together to help families.

Presidential Proclamation

The first proclamation for national adoption awareness (then National Adoption Week) came from President Ronald Reagan in 1984. Here is an excerpt:

National Adoption Week gives us an opportunity to reaffirm our commitment to give every child waiting to be adopted the chance to become part of a family. During this Thanksgiving season, let us work to encourage community acceptance and support for adoption and take time to recognize the efforts of the parent groups and agencies that assure adoptive placements for waiting children. Most importantly, let us pay tribute to those special couples who have opened their homes and hearts to adopted children, forming the bonds of love that we call the family.

This year’s proclamation reads, in part:

Every child is precious and deserves a loving family of his or her own. During National Adoption Month, we honor the adoptive parents who provide homes — and the invaluable gifts of hope, love, and stability — to thousands of infants, children, and youth.

Making Adoption Affordable

One way to support loving parents wanting to adopt children in foster care is by reducing the financial burden it creates for many.

Core Documents exists to help employers, employees, and everyone else reduce federal taxes whenever possible. For National Adoption Awareness Month, we want to make sure recent or soon-to-be adoptive parents are aware of the adoption tax credit as well as how it coordinates with any employer adoption assistance that may be available to the family.

Adoption Tax Credit

In 2020, adoptive parents are eligible for a tax credit of up to $14,300 for each child adopted during the tax year.

This tax credit is fully available to all families up to a modified adjusted gross income (MAGI) of $214,520.
The tax credit is partially available to families with a MAGI from $214,520 to $254, 520.

The adoption tax credit will reduce the family’s total income tax due and may result in a tax refund of taxes withheld but the adoption tax credit itself is non-refundable.

Employer Assistance Plans

If a family member is so fortunate as to have an employer that provides adoption assistance:

The employer may cover up to $14,300 for each adopted child.
Employer adoption assistance funds are excludable from taxable income.
The $14,300 available through the adoption tax credit is separate from and not affected by any employer assistance.

For example: A family with MAGI less than $214,520 has adoption expenses of $18,570. The mother’s employer provides $5,000 through an adoption assistance program. The family receives the $5,000 employer assistance tax-free and still qualifies for the remaining $13,570 of expenses as an adoption tax credit.

Along with spreading the word about adoption tax credits, Core Documents can help an employer interested in setting up an adoption assistance plan for employees. Get in touch with us here for more information on this high-return employee benefit.