Ohio Adoption Tax Credit

Ohio has a new initiative to support adoptive families.  The Ohio Department of Job and Family Services (ODJFS) made a recent decision to provide financial grants to Ohioans who adopt a child.  

The adoption process not only takes an emotional toll on the families, but the financial burden can be high.  These one time grants are aimed at assisting families with the costs associated with the adoption process and can impact your tax return.

The ODJFS is now accepting applications for the Adoption Grant Program.  Since beginning the application process earlier this month, they have received over 180 applications.  

Types of grants

There are 3 types of grants that are available.  Adoptions that are finalized on or after January 1, 2023 will qualify for this new program.

  • Conventional Adoption Grant: Families who go through the conventional adoption process are eligible for a $10,000 grant to help offset their adoption costs.
  • Foster Caregiver Adoption Grant: If you were a foster caregiver prior to becoming an adoptive parent, you can be awarded a grant of $15,000.
  • Special Needs Adoption Grant: Families that adopt a child with a diagnosed (by law) special need are eligible to apply for a one time payment of $20,000.

Impact to your taxes

This new grant program replaces the Ohio individual income tax credit that was previously available to adoptive parents.  The previous credit was repealed at the end of 2022, but carry forwards of the credit for legal adoptions prior to January 1, 2023 are still allowed.

Under the new program, adoptive parents can take an Ohio individual income tax deduction equal to the amount of the grant they receive, as long as the grant was included in their adjusted gross income.  

As always, check with your tax advisor about all deductions pertaining to your unique tax situation.

Oftentimes, the decision to adopt is made without thought to the financial implications.  Ohio’s new Adoption Grant Program can help support families through their adoption journey by helping them with some of the expenses associated with the process.  
For more information on the new ODJFS grant, visit the “It Takes Heart” website.

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