November is National Adoption Month, and there are currently 4.5 million adopted children in the U.S., according to the Adoption Network. For many people who want to open their homes to children in need of adoption, the significant expenses are a hurdle to overcome.
If you’re adopting a child through a U.S. private agency, costs may range from $30,000 to $60,000. Even if you pursue an independent adoption, in which you work directly with the birth parents without using an agency (or the public welfare system), you’ll still need to pay attorney fees and other expenses, which can range from $25,000 to $40,000. International adoption may cost from $20,000 to more than $50,000 — plus travel expenses, which can add thousands of dollars more.
If you’re adopting from a relative, however, the fees can be as low as $3,000, says William Gentry, family law attorney and founder of Gentry Law Firm. Costs are also lower to adopt children who are in foster care, which we’ll discuss below.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Before you bring a child home, you’ll be required to undergo a home study to determine your fitness to be an adoptive parent. Every state and Washington, D.C., require all prospective adoptive parents (with the possible exception of stepparents who want to adopt their spouse’s biological child) to participate in a home study, during which a social worker or a professional from an adoption agency will inspect your home. The home study also includes background checks, child-care training and administrative costs. The total cost for a home study, which may be included in the agency adoption fee, ranges from $1,000 to $3,000, depending on your state’s policies.
You may also be required to cover services for the birth parents, such as pre- and post-adoption counseling, as well as their medical and legal expenses if they don’t have health insurance or legal representation. If you arrange an open adoption, which allows the birth parents to maintain contact with your adopted child on an agreed-upon basis, you may have to provide funds to cover the birth parents’ travel expenses to see the child.
Foster care adoption can cut costs
There are 400,000 children in foster care who need permanent homes, according to the U.S. Department of Health and Human Services. Because the demand for adoptive parents for foster children outweighs the supply, adoptive parents may be eligible for incentives and subsidies, particularly if they’re willing to adopt a child who is older or has special needs.
Shannon and Cody Pinkerton, of Glenrock, Wyo., have 10 children, six of whom they adopted. Shannon grew up with a sister with Down syndrome, so she and Cody always wanted to adopt children with special needs. The Pinkertons adopted Joey, 22, in 2011. Tracee, 27, and Anthony, 24, were adopted in 2013 and 2014, respectively. Biological brothers Cameron, 22, and Julian, 20, joined the family in 2016, and Devlin, 17, was adopted in 2021. Joey, Tracee, Anthony, Julian and Devlin have Down syndrome, and Cameron is blind and developmentally disabled.
Wyoming provides a one-time subsidy of $2,000 per child for families who adopt special-needs children to reimburse them for adoption-related expenses. The Pinkertons also received $1,200 a month for Devlin and $2,000 a month for Cameron and Julian until they turned 18 to cover hospital care and other medical expenses (their sons are also covered by Medicaid). Monthly adoption stipends range from $250 to $2,500 per child, depending on the state.
Even with public assistance, prospective foster parents should be prepared to cover some adoption costs. The Pinkertons paid more than $4,000 combined for their children’s home studies before they were adopted, plus additional fees associated with the process—for example, they paid $100 for each child’s post-adoption home visit, typically conducted by social workers to check on the children’s well-being. The Pinkertons also had to pay a total of $2,500 in court costs to be named the legal guardians of their children when they turned 18 because they continued to require care. And because the Pinkertons adopted their children from various states, they spent more than $3,000 on total travel expenses.
A social worker or adoption advocate can help you apply for adoption subsidies and fill out the paperwork. You can find an adoption advocate in your state at the website of the North American Council on Adoptable Children.
Tax breaks and employee benefits
If you’re considering adoption, see whether your employer’s benefits package includes assistance for adoptive parents. For example, some employers, such as Netflix and Citizens Bank, reimburse their employees for a portion of their adoption expenses. For 2023, you can exclude up to $15,950 in employer-provided adoption expense reimbursement from your taxable income (the amount is adjusted each year to account for inflation). You may also be eligible for paid parental leave once you bring your adopted child home.
You may qualify for a generous tax break to offset your adoption costs, too. In 2023, you can claim a tax credit for qualified adoption expenses of up to $15,950 per child if your modified adjusted gross income is less than $239,230. A tax credit is more valuable than a de-duction because you receive a dollar-for-dollar reduction in your tax bill. You can claim a reduced credit if your MAGI is between $239,230 and $279,230. If you adopt a special-needs child, the full credit is available even if you spent less than the amount of the credit on adoption expenses. You can’t claim the credit for expenses that your employer has reimbursed.
Note: This item first appeared in Kiplinger's Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.
-
The Retirement Bucket Rule: Your Guide to Fear-Free SpendingForget market declines or rising inflation. With this strategy, you won’t have to worry about any of that during retirement.
-
How Big Will the Fed Rate Cut Be This Fall?A dismal July jobs report has lifted expectations for fall rate cuts. But just how low could the fed funds rate be by year's end?
-
You Need to Have This Financial Talk With Your SpouseWomen are poised to inherit significant wealth from their husbands. Here's how they can prepare for it.
-
Surprising Ways to Find Deals on Cars Despite TariffsLooking for a new car? Tariffs will make good deals harder to find, so use these expert tricks to get a lower purchase price and keep long-term costs down.
-
Three Ways to Find Deals in Your Investments This YearLooking for ways to save because of tariffs? Don't forget to look for deals in your investments. Here are three expert tips for making a little extra this year.
-
Don't Miss Out on These Four Credit Card BenefitsCredit card benefits aren't always limited to cash back, points and miles. Check whether your existing card offers these valuable extras — or switch to one that does.
-
Smart Ways to Save Money at MuseumsWant to save money at museums, art galleries, zoos and gardens? Use these tips to get free or discounted admission to national and local collections.
-
How to Find Deals on Travel in 2025Finding deals on travel is an excellent way to cut costs in 2025, as tariffs start to bite. Here are three suggestions for lowering the cost of your next trip.
-
Strategies to Spend Less on Clothing and Online Shopping in 2025It's easy to spend less on clothing and other goods when shopping online. Arm yourself with these expert tricks and tools that will help you grab a bargain.
-
Three Ways to Spend Less on Groceries This YearMore of us are looking to spend less on groceries this year, as tariffs affect food bills. Here are three smart ways to keep grocery costs down.
