The purpose of the University of Pennsylvania Adoption Assistance Policy is to reimburse Eligible Employees (as defined below) for all or a portion of the expenses resulting from the adoption of an Eligible Child (as defined below). The Adoption Assistance Plan governs the provisions of this Policy. The following details supplement the Plan with information to help faculty and staff avail themselves of this benefit.
All University active full-time faculty with a benefits-eligible title, regular full-time staff, and limited service staff are eligible to participate in the Plan after completing their first year of employment. Time as a temporary, part-time, or student worker is not counted toward this one year of employment requirement. To be an Eligible Employee, a limited service staff member must work at least 35 hours per week for nine or more months of the year. If an employee is covered by a collective bargaining agreement, the employee will be eligible to participate in the Plan only to the extent provided in the provisions of the applicable collective bargaining agreement.
413.2 ADOPTIONS COVERED
Adoptions are eligible for reimbursement when the following conditions are met:
- The faculty or staff member is an Eligible Employee.
- In the case of a foreign adoption, the adoption has been finalized.
- In the case of the adoption of a child who is a citizen or resident of the United States, the adoption proceedings have been finalized or formally terminated.
- The reimbursement request is submitted within six (6) months of the adoption's finalization (foreign and domestic adoptions) or formal termination (domestic adoptions only).
- The expenses meet the definition of "qualified adoption expenses" (see Section 413.3).
- The child meets the definition of eligible child (see Section 413.4).
Adoption expenses for foreign adoptions will not be Qualified Adoption Expenses until the adoption becomes final. If the adoption involves an eligible child who is a citizen or resident of the United States, expenses will be Qualified Adoption Expenses only if the adoption proceedings are finalized or formally terminated. In either case, this must occur after the faculty or staff member has completed one year of service with the university, as described under "Eligible Employee."
413.3 QUALIFIED ADOPTION EXPENSES FOR REIMBURSEMENT
The Plan provides reimbursement only for "qualified adoption expenses" (with receipt of payment), which are reasonable and necessary expenses that an Eligible Employee incurs in the form of:
- Court costs,
- Attorney's fees,
- Traveling expenses, including the amount spent for lodging and meals, while away from home, and
- Other expenses which are directly related to, and whose principal purpose is for, the legal adoption of an Eligible Child by an Eligible Employee.
The following expenses, however, are not Qualified Adoption Expenses:
- Expenses incurred in violation of state or federal law,
- Expenses incurred in carrying out any surrogate parenting arrangement, and
- Expenses incurred in connection with the adoption by an Eligible Employee of a child of the Eligible Employee's domestic partner.
413.4 DEFINITION OF ELIGIBLE CHILD UNDER THE PLAN
In general, the term "eligible child" means any child who has not attained age 18 or who is physically or mentally incapable of self-care and who is not the child of the employee's domestic partner.
413.5 APPLICATION PROCEDURES FOR REIMBURSEMENT
To obtain reimbursement, an Eligible Employee must request reimbursement using the Carrot Portal, submitting all of the following information to Carrot within six months of the date of the documentation of the adoption's finalization (or within six months of the termination of domestic adoption
proceedings, if applicable):
- Documentation of all fees, costs and other expenses incurred in connection with the adoption of an eligible child. The Eligible Employee must provide receipts, canceled checks, credit card statements, and/or paid stamped invoices confirming payment.
- For the adoption of an eligible child who is not a citizen or resident of the United States: 1) 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, as well as 2) 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 or documentation of the termination of the adoption proceedings.
- Reimbursement requests must be submitted within six (6) months of the date of the documentation of the adoption's finalization (foreign and domestic adoptions) or formal termination (domestic adoptions only).
- Documentation of all expenses must be submitted at the time you submit the reimbursement request. Additional expenses submitted afterward will not be reimbursed.
For assistance with reimbursement, please use the Carrot website messaging and chat functions after registration.
413.6 REIMBURSEMENT LIMITS
Adoption assistance under the Plan is limited to $5,000 with respect to any Eligible Child. This is a limit on the total Qualified Adoption Expenses that may be reimbursed in connection with any Eligible Child and is not an annual limit, even if the expenses occur over a period of years. There is also a limit of two adoptions per household for the lifetime of employment with the University. However, if siblings are adopted simultaneously, this will be considered as one adoption for the household and the $5,000 limit on reimbursements per adoption is multiplied by the number of siblings adopted at that time.
413.7 REIMBURSEMENT PROCESS
The Division of Human Resources will review requests for reimbursement and determine if the adoption costs qualify for reimbursement, up to the reimbursement limits. After all questions have been resolved about the costs and accompanying documentation (i.e., whether the expenses are eligible, appropriate documentation confirms that the adoption has been finalized, etc.), the reimbursement request will be processed through Workday and the reimbursement amount will be added to the faculty or staff member's paycheck.
413.8 POSSIBLE TAX IMPLICATIONS
Benefits under this Plan are designed to be excludable from gross income under Code Section 137, except in the case of benefits relating to the adoption of the Eligible Employee's spouse's child, as provided below. However, tax exemption may not be available (or may be less than expected) for Eligible Employees with personal or joint income levels above certain dollar amounts. The University will not withhold federal income taxes. Notwithstanding the foregoing, any adoption assistance provided in connection with the adoption of a child of the Eligible Employee's spouse will be fully taxable to the Eligible Employee and subject to all applicable income and employment taxes.
Federal law provides a tax credit for adoption expenses that are not reimbursed by an employer or paid under a state or federal grant program. Because individuals must elect between the tax credit and reimbursement under this Plan for the same expenses, and because for some taxpayers, the credit might produce a lower overall tax liability, employees are advised to seek tax advice regarding this benefit. The tax liability on any payments made under the Plan is the sole responsibility of each Eligible Employee.
Benefits under the Plan are not exempt from FICA, state and city taxes.
The Plan is administered by Human Resources. For additional information about the Plan, please call (215) 898-7372 or contact us online.
Policy Number: 413
Effective Date: 3/2/2020
Last Reviewed Date: 3/2/2020
Revised Date: 3/2/2020
Supersedes Policy Number(s): 413 (7/1/2009; 8/31/2011)
Applicability: All active full-time faculty with a benefits eligible title, active regular full-time staff and regular staff in limited service positions
Cross-reference: Policy 115, Policy 616, Policy 631, Policy 635