Could Adopting 2 Children in 2010/2011 be Free?

Could adopting 2 children at the same time in 2010/2011 be entirely free? Yes! Well, nearly if your income meets the guidelines and you choose a country program in the right price range.

As the entire adoption community knows by now, the adoption tax credit will now be a tax refund for adoptions finalized in 2010 and 2011! This is incredible news for children in orphanages everywhere. It gives them a much greater chance of finding adoptive families, now that parents will be refunded for a good chunk of the fees involved when adopting.  Even if your tax liability is zero, you will get a refund check from the IRS for your adoption related expenses.

The refund amount for adoptions finalized in 2010 is $13,170. The refund amount for adoptions finalized in 2011 is $13,360. All of this expires on December 31, 2011. If anyone out there is waiting for ‘the right time’ to adopt financially, the time is right now. Adoption is a long process, and the entire adoption needs to be finalized by the end of 2011 to qualify for a refund.

Adopting 2 children at the same time could end up being very close to fee free. I am not a tax expert, but as far as I can tell, families whose modified adjusted gross income is less than $182,520* can claim $13,360 per child. I assume this means that adopting 2 children results in a refund of $26,720. The cost of adopting 2 children from Ethiopia is about $27,000. The cost of adopting 2 children independently from Ukraine is about $28,000. This means that the total out of pocket expenses for adopting 2 children could be as little as $1,000.

I’m happy to help families research costs of other country programs, just ask. There are many other countries in that price range, but I only mentioned two as a quick example.

*Note – for tax year 2011, families with an income between $185,210 – $225,210 are still eligible for a tax credit/refund, but not for the full amount. Incomes over $225,210 are not eligible.

See also Adoption Tax Credit

See also the Journal of Accountancy.


Filed under Other Topics

4 responses to “Could Adopting 2 Children in 2010/2011 be Free?

  1. Hi!

    I have been trying to figure this adoption tax credit out for a LONG time and it looks like you may be able to help me.

    My husband is a pastor, therefore is considered self-employed, and we have little “taxable” income. From what I’ve heard, we wouldn’t have been able to benefit from the tax credit as it was last year…but we may be able to from the revision.

    Also, we will not be able to pay out-of-pocket for our adoption. We will be taking an interest-free loan and applying for grants (unless God supplies ALL of the money). Would we be able to get the “refund” to apply towards out loan, even though we didn’t pay “out-of-pocket”?

    Thanks for your insight.


    • Hi Christie,

      Great news! I believe you will be refunded for all of your adoption expenses (up to the amount mentioned in the post) excluding grant money. I think a loan is considered an out of pocket expense because you need to pay that back, which comes out of your pocket 😉 Grant money does not come out of your pocket, it comes out of the organization’s pocket. Here is a further explanation about a non-refundable tax credit (what the adoption tax credit was in 2009 and previous years) vs a refundable tax credit (for adoptions finalized in 2010 and 2011).

  2. Lisa

    Where did you get those costs on Ethiopia and Ukraine? We are looking at Ethiopia and Russia (2 children) and coming up with about $39ooo for either country.

    • I get the figures for Russia here: ($28K + $4K additional child from same orphanage). Keep in mind that my figures are for HIV ADOPTION, not for a healthy infant adoption. The most reasonable agency I have found for special needs Russian adoption is Hand In Hand. Costs in Russia vary by region, with Moscow being the most expensive.

      I get the figures for Ukraine here: ($24K + $4K additional child from same orphanage). Reece’s Rainbow is the best way I have found to adopt HIV+ children from this country.

      I got the figures for Ethiopia from the Yahoo HIV Adoption group. I made an inquiry with the group and a couple of different families got back to me about their total costs for adopting 2 children (at least one of which had HIV). I took the average from those 2 figures (which were in the same ballpark). However, that was before Ethiopia was a 2 trip program, so chances are good that costs are now higher than when I wrote this blog post.

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