Finances and Adoption Assistance

Adoption Assistance Program (AAP):
This entitlement program was created to provide financial and medical coverage to facilitate the adoption of children who otherwise would remain in long-term foster care. AAP eligible children may receive federally funded benefits that may include: monthly negotiated rate, medical coverage, reimbursement of nonrecurring adoption expenses (up to $400 per child per adoption), payment for an eligible out of home placement, payment for eligible Wraparound services, aid regardless of the adoptive family's state or country of residence, and if eligible, benefits may continue to age 21. Do not finalize an adoption of a child from foster care until you have an AAP agreement in writing from the child's agency. For more information, or more information on other states, please refer to the Child Welfare Information Gateway:

Federal Adoption Tax Credit
The Federal Adoption Tax Credit helps offset the costs of adoption and allows more families to afford adoption and provides children with permanent families. This credit applies to all types of adoptions (except step-parent adoption). Families who adopt children with special needs can claim the maximum credit regardless of whether they have qualified adoption expenses or not. A special needs adoption is one in which the state or county child welfare agency has determined that the child is not likely to be adopted unless the government provides assistance to the adoptive family. The special needs determination is almost exclusively for children in foster care. Children who are determines to be special needs are typically older, are part of a sibling group that will be placed together with one family, or have physical, emotional, or mental disabilities. All children adopted from the foster care system with an Adoption Assistance agreement from their state or county are considered special needs for tax credit purposes. Refer to the IRS for more informationand for formal legal guidance: Adoption Tax Credit