[Daisha]

I was just wondering if we can claim our medical deductible and/or co-insurance that we would have to pay for our adoption as an adoption expense??

We have the adoption indemnity plan through our insurance and they take out the deductible and co-insurance out of our $4000.00 benefit, so we in actuality only get back $2800.00. Can we claim the $500.00 deductible and the approximately $700.00 co-insurance as an adoption expense??

Any response would be appreciated!!

Thank you!

[HappyMomAnna]

This is most likkely one of those questions you will have to verify with the IRS....

Is the adoption Final?

Is the medical insurance issue something that will only apply before the adoption is final or is this an expense that will reoccur every year?

By what you have posted I am assuming that you have health insurance that will cover a placed child before adoption is finalized (LUCKY FOR YOU MOST COMPANIES WILL NOT) And that they have fees they charge that are different then birthchildren fees?

If this is the case there could be a real chance that these costs would qualify as adoption expenses under the rules of the IRS because they are 'added' costs simply because the child has been adopted.

If the Health plan charges this fee in general for added children or will continue to charge it after the adoption is Final then you would have to claim these costs as other "medical" expenses on your tax forms and would need to have enough (houshold0 expenses in the medical area to claim any of them as a deduction....

Either way the final word will come from the IRS.

[Daisha]

Anna ~

We have not started the adoption process yet but have looked into all of our financial benefits and expenses (we are big planners).

Our insurance has an adoption indemnity plan that has a benefit of $4000.00. But they take out the deductible and co-insurance just like if we were having a baby that the birth costed $4000.00. So the total cash we will get from our insurance company is $2800.00, the rest is sucked up in a 500.00 deductible and a 20% co-insurance. The only proof that we need to recieve this benefit is the proof of placement, not the proof of finalization. By what you are saying, we have a good insurance huh?

I was just wondering because we don't actually "pay the money" to the agency for our deductible and co-insurance but it does deprive us of 1200.00 of our benefit.

I guess I will have to ask the IRS!! Thanks for trying to help me though. I appreciate it!

[HappyMomAnna]

Actually you do have great insurance to offer this plan.... and they are even better for providing benefits for placement and not adoption finalization....most will only cover actually legal children or step children...

My feeling is that because the $4,000.00 is not money you pay out it most likely will not be an adoption expense--If I remember correctly some compaines offer actually cash assistance to their employees who adopt--and on the Tax forms the families who do recieve this company payment have to deduct the payment from their expenses... the beneifit to the emplyee is that it is non-taxed and not counted as income... Which seems to me to be the same kind of thing your insurance is offereing...and Nice perk but I don't believe you can use those costs for adoption costs I believe that unless the child is Special Needs the costs must be out of your pocket...

But--still talk to the IRS they are some strange people and the laws are so complex who knows?

[Daisha]

I was thinking the same thing that you are, that since I am not physically giving them my deductible and co-insurance that it wouldn't be considered and "expense". The good thing is that our deductible will already be met for the year after this benefit goes into effect.!!

Thanks again!!