Adoption Assistance Reimbursement Program
Iowa State University recognizes that families are built in many ways. In order to support eligible faculty and staff who are adoptive parents, the University offers an Adoption Assistance Reimbursement Program.
What is the Adoption Assistance Reimbursement Program?
The purpose of the Adoption Assistance Program is to provide reimbursement for all or a portion of the eligible expenses resulting from the adoption of an Eligible Child. The Program is intended to satisfy the requirements of section 137 of the Internal Revenue Code of 1986, as amended (the “Code”), and to provide reimbursement to eligible employees that are excludable from federal gross income under section 137 of the Code.
Effective with approval of this program, all active University faculty and staff who are eligible to participate in the University’s benefit plans and programs, including Iowa Board of Regent’s staff participating with the University’s benefit programs, are eligible to participate in the Plan. Eligible Employee includes regular or term appointments of 50% or greater full time equivalent.
Qualified Adoption Expenses
Examples of reasonable and necessary Qualified Adoption Expenses are:
- Adoption agency and placement fees (including home study fees);
- Legal fees and court costs for the adoption;
- Medical expenses required to complete the adoption (including immunizations);
- Temporary foster care costs;
- Immigration and translation fees;
- Traveling expenses (including amounts paid for meals and lodging while away from home);
- Counseling fees associated with placement and initial adjustment;
The following expenses are not Qualified Adoption Expenses for purposes of the Plan and are not reimbursable under the Plan:
- Expenses that violate state or federal law;
- Expenses allowed as a credit or deduction under any other federal income tax rule;
- Expenses paid or reimbursed using funds received from any federal, state or local program;
- Expenses paid or reimbursed by another employer or employer sponsored program, or any other source;
- Expenses for mileage or all forms of fuel;
- Expenses for carrying out any surrogate parenting arrangement;
- Expenses for the adoption of a spouse’s or domestic partner’s child;
- Medical examination fees for the adopting parents;
- Expenses for personal items such as clothing and food for either the parents or child;
- Gifts to orphanages;
- Expenses of the birth mother (including medical expenses);
- Expenses incurred prior to becoming an Eligible Employee under the Plan, even if such expenses would otherwise be treated as Qualified Adoption Expenses;
- Expenses submitted later than twelve (12) months following the date the adoption becomes final;
- Expense reimbursements requested prior to the adoption becoming final;
- Expenses incurred after ceasing to be an Eligible Employee under the Plan;
- Expenses incurred with respect to an adoption that is finalized after ceasing to be an employee of the University; and
- Expenses the University determines are not Qualified Adoption Expenses.
An eligible child is any individual who, at the time the adoption expenses are incurred, is under the age of 18 or is physically or mentally incapable of self-care. A child of the Eligible Employee’s spouse or domestic partner is not considered an eligible child.
The adoption assistance benefits provided by the Plan shall be in the form of reimbursement for Qualified Adoption Expenses if those expenses are incurred in connection with the final adoption of an Eligible Child by an Eligible Employee. The reimbursement is limited to the Eligible Employee’s actual Qualified Adoption Expenses.
Employees participating in this program will be reimbursed up to $5,000 per adoption for qualifying expenses. Should an employee adopt a second child, they can be reimbursed an additional $5,000. There is a $10,000 lifetime maximum. If siblings are adopted simultaneously, this will be considered as one adoption event for purposes of the lifetime maximum.
If both adoptive parents are eligible employees, the maximum reimbursement applies jointly to the combined Qualified Expenses of the household for each adoption event.
Reimbursement Adoption Process & Documentation
Within Workday, select the Create Request worklet and submit a request for Adoption Assistance Reimbursement. The request will be routed to the Division of Operations and Finance, Fringe Benefits Accounting and Compliance Team (FBAC), where a determination of eligibility will be made. Outreach will come from FBAC with either a denial of eligibility or approval. To obtain reimbursement, the eligible employee must submit all the following information within twelve (12) months of finalizing the adoption:
- A signed and fully completed Adoption Assistance Claim Form;
- Documentation of all fees, costs and other expenses incurred in connection with the adoption of an Eligible Child for which the Eligible Employee is seeking reimbursement. The Eligible Employee must provide receipts, canceled checks, credit card statement, and/or paid stamped invoices confirming payment;
- Documentation that indicates whether the child is a citizen or resident of the United States;
- For the adoption of an Eligible Child who is not a citizen or resident of the United States (i) a final decree of adoption by a competent authority of the foreign-sending country establishing a parent-child relationship under the laws of the foreign-sending country, and (ii) evidence that the child has been issued the appropriate visa from the State Department of the United States;
- For the adoption of an Eligible Child who is a citizen or resident of the United States, a final decree of adoption; and
- Any additional documentation deemed necessary by the Plan Administrator and/or Third Party Claims Administrator that establishes satisfactory evidence that the adoption has been finalized or qualifies under the terms of the Plan.
No adoption assistance benefits shall be paid out until the Plan receives evidence that the adoption has become final. In addition, no claim for adoption assistance reimbursement shall be considered or paid under the Plan unless a participant has first completed and submitted an Adoption Assistance Claim Form. Additional steps may be necessary within Workday to track the request and expenses paid out.
Documentation of all expenses for which the Eligible Employee is seeking reimbursement, must be submitted at the time the reimbursement request is submitted. Additional expenses submitted after reimbursement request will be denied for reimbursement. Reimbursements will be made in accordance with the Third Party Claims Administrator’s practices.
Tax Exclusion or Tax Credit
The tax laws regarding the adoption tax credit are complicated and they affect different individuals in different ways. A professional tax advisor is your best source of information about whether you should seek payment of Qualifying Adoption Expenses from the Adoption Assistance Reimbursement Program or claim the adoption tax credit. While you may be entitled to claim both a credit and an exclusion from income for Qualified Adoption Expenses of an eligible child, both cannot be claimed on the same expenses. Because each taxpayer’s circumstances are unique, you should determine whether the credit or employer payment is more beneficial to you. The University does not provide personal tax assistance. Please consult your tax advisor for more information. You may also obtain further information from IRS Form 8839, Qualified Adoption Expenses and its instructions that can be obtained from the IRS website.
The Plan shall be administered by the University through the Division of Operations and Finance, Fringe Benefits Accounting and Compliance Team for all fiscal and tax compliance aspects of the plan, including development and maintenance of the plan document and the University Human Resources Benefits Team for all employee communication and support services. The Third Party Claims administer will be ASIFLEX.
The plan administrator may make and enforce such rules and regulations as is deemed necessary or proper for the efficient administration of the program. The plan administrator, through the Third Party Claims administrator will determine whether expenses are qualified adoption expenses eligible for reimbursement under the program. Additionally, the plan administrator will have discretionary authority to interpret the program and decide any and all matters arising hereunder, including the right to remedy possible ambiguities, inconsistencies or omissions and make factual determinations.
Any such corrections, interpretations, determinations of the provisions of the program by the plan administrator will be final, binding, and conclusive upon all parties, including the University, employees, their families and dependents.
Amendment and Termination
The program is subject to amendment or termination at any time, and for any reason, by the University or pursuant to a written instrument executed by the University’s Senior Vice President of Operations and Finance.