Adoption Assistance in North Dakota: What Financial Help Is Available?

By: Greg Liebl

Adoption is one of the most meaningful legal processes a family can undertake. It can also be expensive. Fortunately, North Dakota and federal law can provide several forms of financial assistance. This article breaks down when and where financial help is available and what adoptive families can expect.

Pre-adoption assistance: paying for the adoption itself

The cost of adoption varies greatly. Foster care adoptions through North Dakota’s AASK program can cost as little as $300. Private domestic adoptions, including those through a licensed agencies, can run between $2,000 and $15,000 in North Dakota, while international adoptions frequently exceed $25,000. Several overlapping programs can help cover these costs.

Federal adoption tax credit (IRC § 23)

The federal adoption tax credit remains the single largest source of financial relief for most adoptive families. For the tax year 2025, the maximum credit is $17,280 per eligible child, with a phase-out beginning at the adjusted gross income of $259,190. For tax year 2026, the maximum rises to $17,670, with the phase-out threshold starting at $265,080.

In a major recent development, the “One, Big, Beautiful Bill” (P.L. 119-21), signed July 4, 2025, made up to $5,000 of the credit refundable for the first time ($5,120 for 2026, indexed to inflation). Previously, the credit was entirely nonrefundable. It could only reduce tax liability to zero. Now families with little or no federal income tax liability can receive up to $5,000 as a direct refund.

The credit covers qualified adoption expenses including attorney fees, court costs, agency fees, home study fees, travel expenses, and lodging. The timing rules differ by adoption type. For domestic adoptions, expenses paid before finalization are claimed in the tax year after payment, while expenses in the year of finalization are claimed that year. For international adoptions, all expenses can only be claimed in the year the adoption becomes final. For special needs adoptions, the full maximum credit can be claimed in the finalization year regardless of actual expenses.

North Dakota state adoption tax credit (N.D.C.C. § 57-38-30.3)

In 2023, North Dakota enacted HB 1176, creating a state income tax credit equal to 10% of the federal adoption tax credit claimed in the same tax year. The credit cannot exceed 50% of the taxpayer’s state income tax liability. For a family claiming the full $17,280 federal credit in 2025, the North Dakota credit would be $1,728 (subject to the 50% liability cap).

Employer-provided adoption assistance (IRC § 137)

Employees whose employers offer qualified adoption assistance programs can exclude up to $17,280 (2025) or $17,670 (2026) from gross income for employer-paid adoption expenses. Critically, employees can claim both the § 137 exclusion and the adoption tax credit, but not for the same expenses. An employee with $25,000 in total adoption expenses could exclude $17,280 of employer reimbursement from income and then claim the remaining $7,720 as a tax credit.

Nonrecurring adoption expense reimbursement under Title IV-E

For special needs adoptions, the Title IV-E program reimburses up to $2,000 per child for nonrecurring adoption expenses under 45 C.F.R. § 1356.41. Covered costs include adoption fees, court costs, attorney fees, health and psychological examinations, transportation, lodging, and food costs directly related to completing the adoption. This reimbursement has no means test. In other words, the adoptive family’s income is irrelevant. The adoption assistance agreement must be signed before finalization, and claims must be filed within two years of the final decree. Each child in a sibling group qualifies individually for the $2,000 cap.

Military adoption reimbursement (10 U.S.C. § 1052)

Active duty military members (directly relevant at Minot Air Force Base, Grand Forks Air Force Base, Camp Grafton, and for North Dakota National Guard members on qualifying orders) can receive reimbursement of up to $2,000 per child and $5,000 per calendar year through the Department of Defense adoption reimbursement program. Covered expenses include agency fees, placement fees, counseling, legal fees, and court costs. Travel expenses are excluded.

Additional military resources include free adoption consultations through Military OneSource, TRICARE coverage for adopted children registered in DEERS, and up to six weeks of non-chargeable parental leave for the primary caregiver.

Nonprofit adoption grants

Multiple national nonprofit organizations provide grants to North Dakota residents:

• HelpUsAdopt.org awards grants up to $30,000, open regardless of family composition, and distributes approximately $150,000 per grant cycle.
• Gift of Adoption Fund provides $1,000–$15,000 per family (average ~$6,400), has awarded over $19.5 million since 1996, and requires only a completed home study and a $50 application fee
• A Child Waits Foundation awards grants weekly for domestic and international adoptions with no application fee
• National Adoption Foundation provides $500–$2,000 per family with no income requirement and a one-page application reviewed quarterly
• Show Hope offers Adoption Aid grants of $8,000–$12,000 (requires a Statement of Faith and pastor reference, with quarterly deadlines)

Legal aid organizations including Legal Services of North Dakota (800-634-5263) and Dakota Plains Legal Services provide free civil legal assistance to income-qualifying families. The ND State Bar Volunteer Lawyers Program offers reduced-fee and pro bono representation through legalassist.org.

Post-adoption assistance: ongoing support after finalization

North Dakota adoption assistance program

North Dakota’s primary post-adoption benefit is the adoption assistance (subsidy) program for children with special needs, administered by the Department of Health and Human Services. The program provides adoptive families with monthly payments, Medicaid coverage, and social services without any means test on the adoptive family’s income or resources.

A child qualifies as having “special needs” under North Dakota law if three criteria are met. First, the child cannot or should not return to the birth parents’ home (evidenced by termination of parental rights or tribal court order). Second, the child has at least one qualifying factor: age seven or older, membership in a minority group, membership in a sibling group, or a physical, mental, or emotional disability (or diagnosed high risk for such a disability). Third, either a reasonable effort was made to place without a subsidy, or documentation shows the child has established significant emotional ties with the prospective adoptive parents. Private and international adoptions generally do not qualify unless an internationally adopted child’s initial placement fails and the child subsequently enters foster care.

Importantly, the subsidy agreement must be signed and in effect before the final decree of adoption. Failure to execute the agreement before finalization can permanently forfeit eligibility.

How Title IV-E and state funding interact

North Dakota operates a dual-track system for adoption subsidies. Children who meet federal Title IV-E eligibility criteria, receive federally matched payments. Children who meet North Dakota’s special needs definition, but not federal IV-E criteria, receive state-funded subsidies, which assigns the state responsibility for “foster care and subsidized adoption costs” in excess of federal funding.

Title IV-E eligibility requires meeting the three-part special needs test plus at least one of six federal pathways: the birth family met 1996 AFDC income guidelines at removal, the child qualifies for SSI, the child meets “applicable child” criteria under the Fostering Connections to Success Act, the child was born to a foster youth receiving IV-E payments, the child had IV-E adoption assistance in a prior dissolved adoption, or the child has been in foster care for 60+ consecutive months.

Medicaid coverage for adopted children

Children receiving Title IV-E adoption assistance are a mandatory Medicaid eligibility group. No separate Medicaid application or income test is required. In other words, enrollment is automatic and continues as long as the adoption assistance agreement remains in effect. For children on state-funded (non-IV-E) subsidies, North Dakota provides Medicaid through the state program.

Duration, extensions, and termination of benefits

Standard adoption assistance continues until age 18. Extensions to age 21 are available in specific circumstances. For Title IV-E subsidies, assistance may continue if the child has a continuing physical, mental, or emotional disability. For state-funded subsidies, assistance may extend if the child is regularly attending secondary, postsecondary, or vocational school pursuing a diploma, degree, or gainful employment. For agreements entered after the child turned 16, the child (at age 18+) may qualify by completing secondary school, enrolling in postsecondary or vocational school, participating in an employment program, working 80+ hours per month, or being incapable of these activities due to a documented medical condition. Families must request the extension in writing before the child’s 18th birthday.

Assistance terminates upon emancipation, death of the child or adoptive parent(s), termination of the adoption, attaining the maximum age, cessation of legal responsibility, a determination that the parents are no longer providing support, or failure to participate in the annual renewal process.

Post-adoption services through the ND Post Adopt Network

North Dakota funds the ND Post Adopt Network, operated by Catholic Charities ND under contract with DHHS, providing free services to all adoptive and guardianship families regardless of adoption type -foster care, infant, international, or other domestic adoptions. Services include support groups, referrals to adoption-competent therapists, parent training, summer camps and winter retreats, a lending library, birth family mediation support, a mentor program, and a respite grant that helps pay for respite care.

Conclusion

North Dakota’s adoption assistance framework is designed to provide a meaningful financial safety net for qualifying families. However, the statutory and administrative structure governing these benefits is multifaceted and, in some situations, rather complex. As a result, navigating the available programs and eligibility requirements can be challenging without careful guidance. If you want to talk more about the potential for financial assistance in your adoption, please contact SW&L’s family law team at 701-297-2890 or email us at: [email protected].

The information contained in this article and on this website is for informational purposes only. Do not rely on the information on this website as legal advice. Please refer to the full disclaimer here.