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Adoption update and tax credit information

Back in November, I posted about the adoption expenses tax credit and explained how my husband and I have been considering adopting for a number of years.  If you missed that post, you can read it here.   The idea came to the forefront again in early March because our daughter kept chatting about how much she wished she had a sister in addition to her brother.  Our son was chiming in saying that he wanted to keep his sister (phew!), but have a brother too.  We have no idea where the idea came from, but we took the opportunity to explain to them that we had been considering adopting two children who didn’t have a mommy and daddy to care for them and asked them what they thought.  They were immediately enthusiastic about the plan.  No, they didn’t mind sharing their toys.  Yes, they would love to share their bedrooms and have more kids around to play with all the time.  Sharing mommy and daddy’s attention would be just fine, thank you.  Did they really understand what we would be getting into?  Of course not.  But would we ever understand it either?

Adoption expense tax credit basics

For a discussion on how this credit works and what expenses can be claimed, click here for my November post.  The 2013 budget addresses only the beginning of the time period when expenses can be claimed.  It does not change what expenses are eligible for the credit or when eligible expenses end.  Regardless of how an adoption occurs (internationally, privately, or through Children’s Aid), once the adoption order has been issued and the child comes to live with the adoptive family, the expenses relating to the care of that child transfer to the adoptive family and are not eligible for the tax credit for adoption expenses (line 313).

Budget changes

Before the 2013 budget, adoptive parents could only begin claiming expenses from the time a child was matched with them up until the child began to permanently reside in their home.  This worked for international adoptions because even though adoptive families had expenses before the child was matched with them, they still had plenty of other costs to claim (i.e. travel and court fees) after the match had been made.  These post-match costs often exceeded the maximum ($11,669 for 2013), so the fact that earlier costs weren’t eligible didn’t matter as much.

The change introduced in this budget impacts domestic private adoptions the most.  In these situations, there are not usually significant travel costs after the match has been made.  There are still post-match legal & agency fees to be sure, but many significant expenses (like home studies and mandatory parent-training programs) are incurred early in the process.  With the new budget changes, these costs will be eligible for the Adoption Expense Tax Credit.

The budget and us

Since we are considering adopting through the Children’s Aid Society, the costs to us before the adoption is finalized would be minimal (if any).  Adoptions through CAS are publicly funded.   When there are no costs for the adoption process, there is no tax credit.  For us, this is no big deal.  The tax credit doesn’t influence our decision one way or the other.  If we decided to adopt either internationally or privately, the tax credit would help.  However, when compared with the costs of the process plus actually raising the children, the tax credit is really a drop in the bucket.  I wouldn’t expect it to be any different.  The Child Tax Credit doesn’t cover the cost of having a child either.  Perhaps in eras past, having children was a financial advantage because they would be free help around the farm.  Not so today.  Children are a tremendous blessing, but not of the financial variety!

Where does our journey stand now?

Earlier this month, we attended an information session at the Children’s Aid Society – not with the view of pursuing adoption immediately, but with the idea of getting some additional information on the process.  Is this something that we’d like to do in the future or should we put the idea to rest?

When we went to the session, our children thought we would be coming back with some siblings for them, so we had some explaining to do when we got home.  No, this is not like going to the supermarket.  It takes time and careful screening on both sides.

At the session, we learned a lot about the process and had the opportunity to read some of the kids’ profiles.  Alex and Bethany (whose names I have changed to protect their privacy) immediately caught my eye.  They were in the right age range and the types of things they needed in a family fit our description.  Could we be the right family for these kids?

Alex and Bethany need constant supervision.  They can’t play on their own for even a few minutes without fighting.  They have attachment issues.  Of course they do!  Who wouldn’t after what they have been through!  But could we handle the constant supervision part?  My day would consist of homeschooling 4 children and then referee duties would start.  Would it be hard?  Absolutely.  Would it completely burn my husband and me out?  Quite possibly.  But those two kids who everyone else seems to have given up on would finally get to be part of a real family. Life is about more than our own happiness and comfort.  But, where do we draw the line between protecting those in our care now and reaching out?

April 21, 2013

2 responses on "Adoption update and tax credit information"

  1. That’s a big, big question! I pray you’ll be given the wisdom to make a good choice.

  2. I hope you make a good choice. Good luck!:)
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