Adoption Assistance Plans
A Simple, No-Cost Method to Encourage Adoption
By helping to defray the high cost of adopting a child, an adoption assistance plan gives an employer the opportunity to boost employee morale and help establish greater equality between the benefits provided to adoptive families and families with biological children. Using this website, even the most cost-conscious employer can accomplish this goal without any out-of-pocket expenditures or employer funding by simply implementing our free model adoption assistance plan as part of its existing Section 125 cafeteria plan. As an employer, you can reduce the financial barriers that may hinder a child's adoption by maximizing the adoption tax benefits available to your employees.
The federal tax code allows an exclusion from federal income taxes for employer payments and reimbursements of adoption expenses made under an adoption assistance plan -- but only if the plan and the benefits meet certain specific requirements. In addition, adoptive parents may qualify for a tax credit for their adoption expenses. If the federal tax relief benefits are properly maximized, the often overwhelming financial barriers facing adoptive parents can be reduced in most adoptions by more than two-thirds (and often eliminated in the adoption of a child with special needs). For example, the costs of an adoption costing $20,000 can be reduced by more than $14,000 so that for many parents the after-tax costs can be less than $6,000.
Employers have a critical role in fundamentally changing this cost equation and eliminating the financial barriers to adoptions. From an employer’s perspective, it is as simple as disseminating the proper information and implementing an adoption assistance benefit as part of its existing cafeteria plan structure- all at no cost to the employer. The favorable tax benefits under the adoption assistance plan are achieved through the employee's salary reduction elections.
This site provides a wealth of information about employer-provided adoption assistance plans. Start by getting a detailed overview of adoption assistance plans in our frequently asked questions, or read a first-person account of a successful international adoption by David Fuller, an authority on employee fringe benefits such as adoption assistance and a tax partner in the Washington, D.C. office of McDermott, Will & Emery. Most important, you'll also find a set of model plan documents that may be used to set up a qualified adoption assistance plan. Or just scroll down for a list of some other useful websites on adoption-related topics.
These documents are provided free of any charge. Their use by other law firms and consultants, in whole or in part, is permitted and strongly encouraged but only if no fees or other charges are imposed on the employer adopting the plan. By making these adoption assistance tax documents freely available to all employers, we hope to help eliminate the financial barriers hindering the adoption of children awaiting loving homes. Please contact David Fuller at dfuller@mwe.com with any comments or suggestions to enhance the usefulness of these documents or with your own adoption success story implementing our complimentary documents. This website was inspired by and is dedicated to Hannah Fuller, the dozens of other adopted children in our Firm family, and the tens of thousands of other children, like her before them, who are awaiting loving and nurturing families. Each of these children can change the lives of their new adoptive families. As an employer, you can help to forever change such a child’s life by implementing this adoption assistance plan to reduce the financial barriers that may hinder that child’s adoption by one of your employees.
This information about adoption assistance plans is a joint public service project of McDermott, Will & Emery's Kids First Initiative and Thompson Publishing Group, Inc.. Our MWE:Kids First program operates in McDermott’s U.S. offices, and focuses on representing children in need, including assuring that they receive appropriate public education and remain in school. We believe that one of the very first steps in placing "kids first" is to ensure that children without parents are placed in loving and nurturing adoptive homes.
Links
Following are links to some other useful websites on adoption-related topics.
Adoption and the Workplace
The Adoption and the Workplace initiative, cosponsored by the National Adoption Center and the Dave Thomas Foundation for Adoption, encourages employers to offer adoption benefits. It offers many articles and resources.
Adoption.com
This comprehensive site features guidance and information on a wide range of general adoption topics, including links to "sister" adoption sites, forums, news, etc.
Dave Thomas Foundation for Adoption
This site contains resources and information to increase adoption awareness while supporting model adoption service programs. Its goal is to increase the number of adoptions of waiting children in North America.
National Adoption Center
The focus of this site is on expanding the adoption opportunities for children throughout the United States, particularly for children with special needs and those from minority cultures.
Government Forms and Publications
These forms and publications are available from the IRS or the Social Security Administration:
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Form SS-5, "Application for a Social Security Card"
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IRS Form W-7, "Application for IRS Individual Taxpayer Identification Number"
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IRS Form W-7A, "Application for Taxpayer Identification Number for Pending U.S. Adoptions"
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IRS Form 8839, "Qualified Adoption Expenses"
About the Website Creator
This link is a Washington Business Journal article that profiles the author of the website and describes the background leading to the website's development
