The NY State Paid Family Leave Program provides New Yorkers job-protected, paid leave so that working families will no longer have to choose between caring for their loved ones and risking their economic security.Read More
WHAT IS THE ADOPTION TAX CREDIT?
Introduced in 1997, the adoption tax credit’s purpose is to make adoption more affordable. As part of the American Taxpayer Relief Act of 2012, the adoption tax credit became a permanent law.
The adoption tax credit is available to those who adopt privately, both domestic and international, as well as through an agency, or through foster care. The credit is not available for step-parent adoptions.
Remember, a tax credit is different than a tax deduction—it’s better! A credit is an amount that is subtracted from your tax liability. The adoption tax credit is also NOT A REFUND. The credit is applied against what you owe in taxes to the federal government.
HOW MUCH IS THE ADOPTION TAX CREDIT?
For the year 2018, the maximum allowed for adoption tax credit is $13,810 per child. The credit phases out for families with higher levels of income. Under the 2018 adoption tax credit formula, adopting parents who earn no more than $207,140 are entitled to take the full credit. For adopting parents who earn between $207,140 and $247,140 in income, there is a reduced tax credit, and no tax credit is available for those earning more than $247,140.
WHICH ADOPTION EXPENSES CAN BE CLAIMED?
The adoption credit is offered for “qualified adoption expenses.” Qualified adoption expenses include:
• reasonable and necessary adoption fees;
• court costs and attorney’s fees;
• adoption travel costs (including meals and lodging); and
• other expenses that are directly related to adoption.
Remember, it is important to keep all invoices and receipts for fees and costs as well as court documents and agency agreements related to your adoption. There is no requirement to attach the adoption expense documentation with your tax return. You must, however, keep the documentation as part of your own records as you may be audited by the IRS for authenticity.
Some employers offer an adoption assistance program for adoptive parents. If the adopted child does not have special needs, those expenses paid for by the employer would not be qualified adoption expenses for purposes of the adoption tax credit.
WHAT IF I ADOPT A CHILD WHO HAS SPECIAL NEEDS?
For parents who adopt children with special needs, the full credit of $13,810 may be allowed for the adoption even if you do not have any qualified expenses at all or if you have benefited from your employer’s adoption assistance program.
For purposes of the adoption tax credit, a child has special needs if:
the child is a citizen or resident of the United States when the adoption effort began;
a state determines that the child cannot or should not be returned to his or her parents’ home; and
the state determines that the child probably will not be adoptable without assistance provided to the adoptive family.
In other words, for adoption tax credit purposes, “special needs adoptions” are generally children in foster care and are not necessarily children who have disabilities.
WHEN CAN I CLAIM THE CREDIT?
The tax year you claim the credit depends on when the expenses were paid, whether the adoption is domestic or international, and when the adoption is finalized.
In a domestic adoption, qualified adoption expenses paid before the year the adoption becomes final are allowable as credit for the tax year following the year of payment regardless of whether the adoption is finalized. In an international adoption, qualified adoption expenses paid before and during the year are allowable as a credit for the year the adoption becomes final. Once an adoption is finalized, qualified adoption expenses paid during or after the year of the finalization are allowable as a credit for the year of the payment, regardless of whether the adoption is domestic or international.
It is also very important to note that any credit in excess of your tax liability may be carried forward for up to five years.
HOW DO I CLAIM THE ADOPTION TAX CREDIT?
To claim the credit or exclusion, complete Form 8839, Qualified Adoption Expenses, and attach the form to your Form 1040, U.S. Individual Income Tax Return.
HOW DOES THE ADOPTION TAX CREDIT WORK?
For example, a family does their 2018 federal taxes and finds they owe $5,000 in taxes and is eligible for the full tax credit of $13,810. Therefore, they may apply the credit against their tax liability and pay zero in federal taxes for the year. In addition, they may carry over $8,810 to apply against their tax liability for the next five years.
FOR MORE INFORMATION ON THE ADOPTION TAX CREDIT VISIT: https://www.irs.gov/taxtopics/tc607.html
*Please note: We are not financial advisors or tax preparers. This advice should be considered general guidance only and not professional advice or as a substitute for IRS instructions. Be sure to check with the appropriate tax advisor, or other professional for your specific situation.
*Please also note: This information is relevant to families considering the adoption tax credit for the 2018 tax year. Rules and eligibility have changed over the years and are not documented in this article.
Today’s world of multi-cultural, bi-racial, trans-national and blended families creates new challenges in parenting. As a white mother of two white sons, I do not pretend to have first hand knowledge of the special issues that arise when parenting a child of different racial and cultural heritage. To help me understand the issues and the conflicts multiracial families face, I have listened to and read the work of many experts and absorbed the personal stories shared by my clients. Their insights and suggestions have been thoughtful and eye opening. The following is my attempt to share some of their wisdom. I hope it can be helpful to all of us.
Talk, communicate, discuss and talk some more! Talking about race, as a white person, is often challenging for lack of experience and fear of getting it wrong. However, there is no such thing as being “color blind”. Pretending racism does not exist in our world is unhealthy for your child and potentially dangerous. When a child is very young, their focus is centered on their family. Your child may express that he wishes he looked more like you. This is a wonderful opportunity to let him know you validate who he is and that you would not want to change one thing about him! Celebrating one’s differences does not just mean celebrating the cultural aspects of a different ethnicity. You may want to educate yourselves on the ways your child’s ethnicity, race and culture developed differently from yours. This is a perfect time to dig into your ancestry and when, how and why your family came to America, as well as your child’s ethnic ancestry. Share your ancestry with your children. Very few of us had ancestors on the Mayflower!
As they age, children live more in the world and race begins to matter. Children learn about colors in pre-school and they know we are not all the same color. Particularly in school, children become aware of their differences on a daily basis, whether it be the shape of their eyes, skin color, hair style, even religion. It is critical for all parents to learn to talk about race. All of our identities are valuable and should be honored, not swept under a rug by pretending we are the same. Racism exists and if a parent leads the way in recognizing it and addressing it, the child will know their home and family is a safe space, where they can talk about the tough stuff. As children get older and experience racism in the outside world, it is healthy for them to be able to bring these issues home and express themselves freely in their family. If they cannot come home with their troubles, they are in danger of internalizing and absorbing the racism as personal. The lesson I heard over and over was “do not wait until your children are old enough” to talk about race.
Does your home reflect your and your children’s race? The art, books, children’s movies, media such as television should reflect all members of the family throughout your home. Does the family in your daughter’s dollhouse look like your family? Multi-racial books and toys, artwork throughout the house, not just in the child’s room, affirms for your child that the whole family cares about race and it is not just important to her. Is your child isolated in a white community? Introduce role models who share the same racial background as your child. It is not enough to expose your children to famous actors or sports figures of the same race. Role models can be friends, teachers, doctors, coaches, clergy and others who have a real role in your child’s life and with whom they can connect in a real way.
Remember children like to fit in. Hairstyles often bring up issues in trans-racial adoption. Are you imposing generational or white prejudices on what is “good” or “bad” hair or what style looks pretty? Style is important to children of all ages. Your child may want her hair to reflect what she sees in her world, on TV, at school, or in her community. At the same time, parents should keep in mind that some style choices may not be the most practical. While braids and beads might not fit comfortably under an ice hockey helmet, they might be the best style if your child is on the swim team. Parenting professionals say the key is to remain child focused with this issue. Children should feel proud of how they look, how they perceive they fit in and of who they are.
How does a parent help his child cope with prejudice? It is critical for your child to learn to trust that you are open to discussing these issues. Respect for ourselves and for others starts at home. It is far safer and healthier for your child to talk openly with you about how to deal with ignorance and racism, than for her to feel she is alone and that no one in her family would understand if she encounters it in her outside world. Find supportive friends or family members, especially other parents, to help you manage issues that you have never had to consider. Trans-racial families face unique issues at all stages of child development. During every step of the journey, families should share a commitment to having open communication, listening and forever honoring and celebrating our differences.
There are numerous, wonderful resources you can find on these issues. We would like to share and recommend the following wonderful resources: Multiracialsky.com, Inside Transracial Adoption by Gail Steinberg & Beth Hall and What Do I Say Now by Carol Bick and M.C. Baker.
Let me start with the legal truth that an adoptive parent is a legal parent and has the same rights and responsibilities toward his or her child as a biological parent.
On August 30, 2016, the New York State Court of Appeals ruled decisively in favor of parenting rights for unmarried, same sex couples. In The Matter of Brooke S. B. versus Elizabeth A., the Court ruled that with respect to an unmarried couple, a partner with a non-biological, non-adoptive relationship to the couple’s child may be legally recognized as a parent and allowed to seek custody and visitation rights. The non-biological, non-adoptive partner, however, must show by clear and convincing evidence that the parties agreed to conceive and raise the child together to establish his/her right to custody and visitation.
While this ruling is good news for non-biological parents and non-adoptive partners, relying on the new precedent and forgoing adoption may be dangerous. It is true that along with marriage equality, many states have begun to recognize a more modern and flexible definition of who is a legal parent. Laws on same sex parenting, however, still vary from state to state. The fact remains, that only an adoptive parent of a non-biological child has the same unequivocal rights and responsibilities toward his or her child as a biological parent.
Adopting your non-biological child is safe, responsible parenting. It can be accomplished quickly and inexpensively. No one wants to be kept away from his or her child pending the outcome of a lengthy custody battle. Obtaining the second parent adoption order saves one from the burden of proving his or her status as a parent in the event of divorce, separation, and even death of a partner. I envision scenarios where the couple separates and the biological parent moves with the child to a state with less friendly parenting laws, or passes away, and the extended family claims custody of the child over the non-biological partner. Adoptions are court orders, which all states are required, by the Full Faith and Credit Clause, of the Unites States Constitution, to recognize. This guarantees a parent’s rights and takes the guesswork out of whether one has standing to sue for custody of one’s child.
An adoptive parent is a legal parent and may make all the same decisions for the child as the biological parent. An adoptive parent has the right to make decisions concerning the child’s education, health and medical well - being. An adoptive parent is financially responsible for the child and the child is able to inherit from his or her adoptive parent even in the absence of a will. A non-adoptive parent may find obstacles in claiming his child as a dependent for health or tax benefits and may not even be allowed to provide permission for school field trips.
The requirements to complete a second parent adoption in New York are not lengthy. They are the same requirements for a step-parent adoption among married couples. You will need to retain an attorney and obtain a home study from a licensed social worker. The court will require medical and financial updates, letters of reference and criminal and abuse background checks. Your attorney will prepare several affidavits and a petition for adoption for your signature. The court will hold a 5-10 minute finalization hearing, at which you will be invited to bring friends and family to witness and celebrate the adoption. The whole process should not take more than 4-6 months. The benefits, however, exist for a lifetime. Your family is worth it.
Being an adopted child or an adoptive parent can invite strange and unwelcome comments from strangers, as well as family and friends. Sometimes it is helpful to be ready with an easy answer, so that you, or your child, do not feel defensive or angry. Your child may be asked questions about her “real parents” or “real family”, especially if he is of different racial background or the adopted child of a same sex couple. It may be difficult to avoid the unwelcome comments and questions, but you can be a positive role model for your child and for adoption if you think about your response and reply calmly.
One insensitive and particularly galling question is “Why would you want someone else’s child?” It takes a lot of patience to smile and say, “Alex is my child and I love being his parent”. When others speak in terms of your child’s “real parent”, it is helpful to educate them to understand that your child had a birth family, or a first family and that you are her parent and forever family. A child might be asked who or where her “real family” is. It is helpful for her to know that while she had a first or birth family, you are her real and forever family. After a stranger nosily insisted that her daughter looked nothing like her, one adoptive mother smiled and said, “I know. Sara is so cute, I wish I looked more like her!”
A foster father once told me his foster son was confused about who his Daddy is. This Dad gently explained to his foster son that a Daddy is someone who makes him breakfast and dinner, and special treats, reads him books, plays with him and is always there, everyday, to hug and love him.
Gay Morrissey, LMSW, is a social worker in private practice and has been performing home study reports, in New York, for the past 25 years. Gay is also an adoptive mother of two adult daughters, Kate, 27, and Liz, 25, whom she and her husband adopted as infants. Gay explains, “Children figure out how to respond to questions about adoption in a way that is unique to their personalities. Kate to this day is more likely to ‘go to task’, and Liz is much more likely to ‘let things roll’”. Gay shared that she told her girls their adoption stories from the earliest of ages. As the girls grew older, Gay explained that some people, adults and children alike, ask questions about adoption simply out of curiosity and often out of ignorance. Gay counseled her girls, and numerous adoptive families, that we should practice what to say when asked a difficult question, but more importantly that we know how to talk about our family’s adoption story with each other. Of course, every chance she gets, Gay reminds her girls that she and her husband are lucky to have them as their daughters!
People are generally well meaning but can say hurtful things out of ignorance. I am told clients have actually been asked how much their child cost! It takes a very strong and patient person to calmly answer that one! Sometimes less is more and maybe, in such a situation, you can find the inner peace to suggest the questioner research different agencies and call a few adoption attorneys to get a sense of adoption expenses. Adoption is a wonderful avenue to becoming parents and while you may not have signed on to be an adoption advocate, our community and our children become stronger and better understood when we speak of adoption in a positive manner.
Since 1994, Tapestry Books has been a leading literary source for adoptive families, birth families, adoptees, and adoption professionals. Hand picked by the team at Tapestry Books, enjoy this carefully selected mix of best sellers about adoption as well as publications for the whole family that last a lifetime. Click on an image if you are interested in purchasing the book online.
You can learn more about Tapestry Books at http://www.tapestrybooks.com. Their phone number is 716-544-0204 and they are happy to make more recommendations.
Post Adoption Depression (PADS) is a term used to describe the stress, anxiety, and depression experienced by many parents following adoption. PADS is rarely expected, typically crippling, and frequently goes untreated.Read More
Whether adopting privately, or through an agency, all New York courts require a lawyer to represent adoptive parents at finalization. Choosing your adoption attorney is an important decision and one that should be made with careful thought. Here is a short list of tips to consider when deciding which attorney you will choose to guide you through your adoption journey.
1. Choose an attorney that specializes in adoption. The practice of family law does not always include experience in adoption. When interviewing attorneys, ask how many years they have been in practice and confirm that they have significant experience in adoption law. Your uncle, the real estate attorney, may be a terrific guy but do not ask him to handle your adoption!
2. Be sure your adoption attorney is licensed in your state. Adoption laws differ significantly from state to state across the country. If the birth mother of your adoptive child resides in a different state, your attorney should be prepared to help find a lawyer for the birth parent and be comfortable considering which state’s laws best suit you to govern the adoption.
3. Hire an attorney who works with a social worker. Whether your attorney is a solo practitioner, or works for a larger firm, it is important that they have a social worker to rely on for home studies and counseling. Adoption is a very special and sometimes emotionally challenging process. Work with an attorney who can recommend an experienced adoption social worker to provide you with additional support from the beginning of the home study through post placement and finalization day.
4. Ask for recommendations. Adoption is a personal process filled with life changing decisions. Be sure to talk to family, friends, and people you trust who have been through the adoption process and can give feedback about their attorney. Hearing personal stories about relationships with adoption attorneys can better inform you when choosing the right fit for your family. Don’t be afraid to ask your attorney for references.
5. Discuss lawyer’s fees prior to deciding whom to retain. Some adoption attorneys work at an hourly rate while others charge a flat fee. Be sure to ask questions about fall through fees, time limits of the representation, and any other costs that may arise. Adoptions, whether through an agency or a private attorney, can be expensive with lawyer’s fees, birth mother expenses, birth mother attorney’s fees, and travel costs. Budget concerns should be taken into account early in the process.
6. Look at the attorney’s website. Be sure to read the lawyer’s website to find out more about their practice. Does the lawyer represent birth mothers too? Does the website reflect sensitivity to issues birth mothers face?
7. Ask about the attorney’s policy for returning phone calls and emails. Some attorneys work 9 to 5, Monday through Friday. Others are available seven days a week. It is important to have a realistic expectation of how quickly your attorney will respond to your questions. Knowing how your attorney works will better prepare you during your journey.
8. Interview multiple attorneys. By meeting with several lawyers, you will be able to compare and contrast different working styles. A good personality fit, a strong rapport, and a connection you can trust during the process is paramount!
9. Don’t be afraid to ask questions. Whether related to fees, time frame estimates, how many adoptions the attorney has finalized, or whether a prior criminal arrest will pose a problem—every question is important at every step in the adoption process. You should feel comfortable asking your attorney for guidance, information, and support.
10. Find out what services the attorney provides. Are there separate fees for the pre-certification process? Does the attorney guide clients through profile creation and advertising strategies? Many agencies charge a separate fee if an adoption plan fails. Does your attorney charge such a fee? Be sure to have a clear understanding of what your attorney’s services include to avoid surprises.
Those first few months after bringing your baby, or child, home are a whirlwind of family and friends visiting, pediatrician appointments, nonstop grocery and drugstore runs and a complete and utter lack of sleep! Despite this craziness, I am going to suggest you make time to think about and discuss your finances. If there is one thing I know, it is that children do not cost less or take up less of your time as they grow! They eat more, outgrow their clothes, have birthday parties, need braces, require dance and sports accessories, attend summer camp programs and don’t get me started on college tuition!
Here are five great tips to consider when planning your financial success as a family:
1. Prepare a Budget: Write down all of your new and obvious monthly expenses, such as diapers, baby wipes, bottles and formula, daycare if you both go back to work. What do you plan to spend on baby gear such as a crib and changing table, high chair, stroller, car seat? What are your typical, monthly, household expenditures? Now is the time to rework your budget so that you include the new expenses and they do not catch you open-mouthed and unaware after a couple months. Lack of sleep and financial strain are not good for one’s health. Prepare yourself and avoid unnecessary surprise and stress at the end of the month.
2. Update your Wills and Life Insurance. Now is the time to insure your family’s security if something were to happen to you. “You need a will, not only to determine who are the beneficiaries of your assets, but also the manner in which they pass. If you prefer your assets to be protected for your child until she reaches a certain age, you may want to create a trust for her,” says Sharon L. Klein, President of Wilmington Trust in the New York Metropolitan region. You will also want to make the important decision about who should raise your child, should you not be around, and name the guardian of your choice in your will. In addition, you want to prepare health care proxies, which allow someone of your choosing to make medical decisions for you in the event you are unable to do so, and “Living Wills”, for each spouse, which express the desire not to be kept alive by machinery. If your family relies on you financially, you need life insurance! Klein notes that “term life insurance is a less expensive way to protect your family than whole life insurance, in the event that the bread winner has an unexpected, early demise.” Have you considered how your spouse will afford the mortgage? You may want to also consider purchasing life insurance on the non-working spouse. If the non-working spouse passes, this insurance will pay for necessary child-care, so the working spouse may continue to work. Klein warns, however, “that life insurance does not pass under your will, rather it has a separate beneficiary designation, so it is critical to insure that the insurance passes in a manner that dovetails with your overall estate plan.” Of course, if you are a single parent it is readily apparent that you must make these decisions, in advance, so that it is not the court or a family member who determines your child’s future. You are best advised to avoid the on-line sites, which allow you to prepare “do it yourself” wills. When it comes to the critical decisions that will impact your cherished family and your hard-earned assets, you should seek the assistance of a lawyer to customize your plans to best fit your circumstances.
3. Prepare for Retirement and Emergencies. Retirement may seem like a long way away, but this is surely an expense we all face eventually. Thomas Henske, Certified Financial Planner and Partner at Lenox Advisors, notes that “Putting yourself in a good place for retirement savings is all about building good habits. It is more important that you establish a regular savings routine (monthly, for example) than actually getting the right amount to save at the start of this endeavor. You can always adjust the amount up a few dollars without it making a noticeable difference to your lifestyle.” Henske advises to save regularly, not just when the mood hits you. If your employer has a 401k plan, sign up for automatic pre-tax deductions from your paycheck to go to your account. Employers often match their employee’s pre-tax contributions up to a certain amount. This is free money, so look into it! If the 401k is not available, it is easy to set up an IRA. Retirement loans are not easy to find late in life. The sooner you start saving for retirement, the more money you will have thanks to the compounding of interest and dividends.
A rainy day fund for unexpected emergencies is also an important item to include in your budget. Experts say it is good to have six to nine months of salary put aside in case of unexpected job loss or a big emergency. If only one of you is working, you may want to put away closer to one year’s salary. You may have 30 or 40 years to save for retirement, but one never knows when you will have to dig into emergency savings funds for a new car, new roof, or medical care. It is important to set up this savings account so that if that emergency arises, you do not have to dip into a retirement fund and suffer taxes and penalties for early withdrawal.
4. Think about starting a College Fund. The cost of college is going up, up, up! The good news is you have close to 20 years before this big ticket item hits your budget. There are also many venues for scholarships, loans, and grants to help with the cost of college. There are many options, such as stocks and bonds, to begin putting a little away for college now, which will grow and save you a bundle down the road. Many experts recommend 529 accounts because they are designed specifically to save for tuition, to compound and grow tax free and they are easy to set up. Money withdrawn for future college expenses will be tax free, but experts caution to be comfortably saving for retirement before you start putting away money for college.
5. Establish A Regular Schedule. Above all, set up a regular schedule to discuss your savings and financial goals with your partner, or if single, revisit your progress and determine whether you are on track to meet your goals. It takes time to change spending and savings habits. Keep the channels of communication open with your partner and make sure to plan for grown up fun and time out!
Dr. John DeGarmo is a leading expert in the parenting and foster care field. He has authored several books and frequently writes for the Huffington Post. His article, 7 Things You Should Never Say To A Foster Parent, caught my eye and lodged in my heart. Dr. DeGarmo, a foster parent to more than 50 children, over the past fourteen years, captures the beauty of opening one’s home and heart to a child in need of love and security with his empathic words. There are far too many children, hurting, suffering and in need in our country. Consider fostering and fostering to adopt and become “rich with love, laughter, and the opportunity to watch children heal and find hope”. You can find Dr. DeGarmo at The Foster Care Institute. Call Leslie and me to talk about foster adoption and whether it could work for you.
August 1, 2018 ushered in a comprehensive, new “Adoption Option Act” in Louisiana. Legislators unanimously passed and the Governor signed into law Act 562, which limits adoption expenses paid, by adoptive parents for birth parent expenses, to $7,500. The new law changes the word “reasonable” expenses to “actual” when listing the types of expenses with which adoptive families may assist an expectant mother. Allowable expenses will continue to include medical costs and legal fees, temporary housing, maternity clothes, food and personal hygiene products. The law specifically excludes living expenses such as vehicles and leisure activities. In addition, the law provides that lying about pre-natal expenses shall be a crime punishable by up to $50,000 fine and 10 years in prison.
This spring, Georgia updated their state’s adoption laws for the first time in almost three decades. Act HB 159 reduces the length of time a birth mother has to change her mind and revoke her consent to an adoption from ten (10) days to four (4) days. A second piece of the legislation allows for adoptive parents to assist a birth mother with certain living expenses in private adoptions. The legislature is still debating a proposal to allow faith-based adoption agencies to refuse to work with same-sex couples.
In a more negative trend in state law, Oklahoma passed a law in May, which would allow private adoption agencies to discriminate against L.G.B.T.Q. couples on religious grounds when placing children. The Governor, Mary Fallin, explained the law allows agencies to choose not to place children in certain homes if it “would violate the agency’s written religious or moral convictions or policies”. Critics of the law, which also applies to private agencies working in foster care, said it was unconstitutional and would hamper efforts to find secure, permanent homes for children.
Yes - you can adopt as a single parent! The Dave Thomas Foundation celebrates all families that can provide a permanent and loving home for children in foster care. Learn more at davethomasfoundation.org.