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Adoption Assistance Program

Vanderbilt University Medical Center offers an adoption assistance benefit to eligible full-time employees. Adoption is defined as steps taken through legal procedure to assume parental responsibility for an unmarried child younger than eighteen (18) years of age. An employee who adopts a child is eligible to use Parental Leave and can also access Non-FMLA Medical and Personal Leave of Absence policy (if available).

Eligibility

Full-time employees who meet the established criteria listed below are eligible for reimbursement for eligible expenses related to the adoption process. Reimbursement cannot exceed $3,000 per child with a lifetime maximum limit of two (2) adoptions per employee.

  • Regular employees with at least one (1) year of continuous service in a full-time regular position at the time of application for the benefit.
  • The adopted child must be under the age of 18 at the time of adoption and must not be married.

Eligible expenses include:

  • Adoption agency and placement fees
  • Attorney's fees/court costs
  • Cost of temporary foster care for the child (during the adoption process)
  • Immunizations (during the adoption process and prior to the finalization of the adoption)
  • Reasonable and necessary transportation and lodging associated with the adoption

This program is intended to meet the criteria and conditions set forth in Section 137 of the Internal Revenue Code for adoption assistance programs.

Exclusions include:

  • Temporary, term and part-time employees
  • Children 18 years or older
  • Step-children residing in the household of a natural parent
  • Expenses related to the surrogate parent prior to the adoption
  • Adoption expenses incurred prior to the effective date of this policy

How to Apply

Once the adoption is finalized, submit the Adoption Reimbursement Request Form along with itemized receipts and a copy of the final adoption papers from the court to the Benefits Office for review, approval and reimbursement. Once approved, the copy of the adoption records will be returned.

Tax Information

Adoption assistance reimbursement is not subject to income tax withholdings. However, this benefit amount is subject to FICA tax withholding. An employee who receives a reimbursement or payment from VUMC under this program but who does not qualify, or only partially qualifies, for the exclusion from income under the Federal Tax Code must make an appropriate adjustment on his/her IRS Form 1040 to include in gross income the taxable portion of the reimbursement.

In addition, the employee may need to make an adjustment to his/her income tax withholding certificate (IRS Form W-4) or make estimated tax payments to avoid potential penalties for underpayment of tax on the taxable portion of a reimbursement. Consult IRS Publication 505 and Notice 97-9 1997-2 I.R.B. 35 for more information on estimated tax payment obligations. You can also contact the IRS at 800.829.1040.


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