Know the law before adopting Published Oct. 7, 2010 By 87th Air Base Wing Legal Office JOINT BASE MCGUIRE-DIX-LAKEHURST, N.J. -- Every state has agencies arranging and supervising adoptions by working with both the adoptive parents and the birth parents to match adoptive parents with children. Generally, the adoptive parents are responsible for the birth mother's medical, legal and other associated expenses while the adoption proceeds. Older children are also available for adoption, though in some cases the parental rights of the birth mother and father have already been terminated by the state. Adoption procedures vary from state to state. Nevertheless, all states require adoptive parents to prepare for the adoption in conjunction with a social worker. This preparation includes an interview and a home inspection to determine whether they are "fit." Once the social worker and state agency are both satisfied, a court finalizes the adoption. Adoption agencies are listed in the phone book, though it may be best to get a referral from an acquaintance. Generally, in step-parent adoptions, if the other parent consents to the adoption, an attorney is not needed. Many agencies have long waiting periods prior to making children available for adoption. Therefore, some parents often turn to adopting a child from another country; however, this can be especially complicated. Anyone attempting to adopt a child from a foreign country can expect to complete a considerable amount of paperwork and to work closely with the Bureau of Citizenship and Immigration Services. The best method is to find another parent who has adopted from the same country and then contact the attorney the person used. An eligible child is either a person under the age of 18 at the time of the adoption, or a person physically or mentally incapable of taking care of her or himself. A "child with special needs" is an otherwise eligible child who: (1) is a citizen or resident of the United States, (2) the state determines cannot be returned to the parent's home and (3) it is reasonable to conclude cannot be placed with adoptive parents without adoption assistance because of a specific factor or condition, such as age, ethnic background, medical condition or handicap. In addition to providing for an Adoption Expense Credit, the 1996 Tax Act enacted a new code section of the Internal Revenue Code, section 137 which provides an exclusion from an employee's gross income for amounts paid by an employer for qualified adoption expenses connected with the adoption of an eligible child by an employee; if such amounts are finalized pursuant to an adoption assistance plan. The total amount excludable by the employee from gross income for all tax years with respect to an adoption of a child is limited to $5,000, or $6,000 with respect to a "child with special needs." The exclusion with respect to a foreign adoption is limited to $5,000, despite the fact that a child may have special needs. The $5,000 and $6,000 limits are per-child, not per-year. Amounts paid by an employer for qualified adoption expenses under an adoption assistance program are not subject to income tax withholding. However, these amounts are subject to social security and Medicare taxes (FICA). The amounts are excludable from the employee's gross income for the year in which the employer pays the qualified adoption expense in connection with the adoption of an eligible child who is a citizen or resident of the United States at the time the adoption commenced. In the case of foreign adoptions, the exclusion is only available in the year the adoption becomes final. An individual may claim both a credit and an exclusion in connection with adoption of an eligible child, but may not claim a credit for any expense reimbursed by the individual's employer. Also, DoD Instruction 1341.9 authorizes reimbursement of adoption expenses in certain situations. It is important to consult a civilian attorney at the start of the process to make preliminary decisions regarding adoption. Anyone who is thinking about adopting a child or allowing your child to be adopted by another, should speak with a civilian attorney who can advise them of their rights and responsibilities and make sure all documents are complete and any court hearing is correctly handled to avoid the failure of an adoption. For more information, or to make an appointment, call the base legal office at 754-2010. This article is for informational purposes and is not intended to constitute legal advice or counsel.