Policy Manual

Adoption Assistance

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 employees avail themselves of this benefit.

413.1 ELIGIBILITY

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.
  • The expenses meet the definition of Qualified Adoption Expenses.
  • The child is an Eligible Child.
  • The reimbursement request is submitted within 6 months of the adoption's finalization (foreign and domestic adoptions) or formal termination (domestic adoptions only).  Reimbursements can be requested on an ongoing basis before finalization or termination.

Reimbursement must occur after the employee has completed one year of service with the University, as described under "Eligible Employee" above.

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.

For purposes of calculating Qualified Adoption Expenses, expenses are determined on the basis of the
Eligible Employee's family unit. Accordingly, Qualified Adoption Expenses include those expenses
incurred by the Eligible employee's spouse or domestic partner for the adoption of a child of the
Eligible Employee.

The following expenses, however, are not Qualified Adoption Expenses:

  • expenses incurred in violation of state or federal law, and
  • expenses incurred in carrying out any surrogate parenting arrangement.

413.4 APPLICATION PROCEDURES FOR REIMBURSEMENT

To obtain reimbursement, an Eligible Employee must request reimbursement using the Carrot Portal.  If you do not yet have a Carrot account, you will first need to create your account.   To obtain reimbursement from Carrot, you will be required to provide documents and other  information to substantiate the expenses. You may also be asked to provide documents and other  information necessary to determine whether the reimbursement will be taxable to you. Documentation  of all expenses must be submitted at the time the reimbursement request is submitted.

  • Documentation of all fees, costs and other expenses incurred in connection with the adoption of an Eligible Child. Note: you may be required to provide receipts, canceled checks, credit card statements, 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: 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.
  • Reimbursements will be made in accordance with the University's standard payroll practices.

Carrot, in consultation with Human Resources, will review requests for reimbursement and determine if
the adoption costs qualify for reimbursement, up to the reimbursement limits.

The University will rely on the information you provide in your request for reimbursement to
determine if your benefit will be taxable. For more information on the taxation of Plan benefits,
please review the "Tax Treatment" section below.

413.5 REIMBURSEMENT LIMITS

Adoption assistance under the Plan is limited to $10,000 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 $10,000 limit on reimbursements per adoption is multiplied by the number of siblings adopted at that time.

413.6 POSSIBLE TAX IMPLICATIONS

Benefits under this Plan may be excludable from gross income under Code Section 137, depending on
the nature and timing of the reimbursement. To be excludable from gross income, the adoption must
have been concluded before reimbursement is provided to you. What this means will depend on
whether the adoption is a foreign or domestic adoption:

  • In the case of a foreign adoption, the adoption must have been finalized for expenses to be
    excludable.
  • In the case of the adoption of a child who is a citizen or resident of the United States, the
    adoption proceedings must have been finalized or formally terminated for expenses to be
    excludable.

The following adoption assistance will be fully taxable to the Eligible Employee and subject to all applicable income and employment taxes:

  • any adoption assistance provided in connection with the adoption of a spouse's child, and
  • any adoption assistance provided in connection with the adoption of a child of an Eligible Employee's child by a domestic partner.

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.

413.7 ADDITIONAL INFORMATION

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. Accordingly, individuals must elect between the tax credit and
reimbursement under this Plan for the same expenses, and for some taxpayers, the credit might
produce a lower overall tax liability.

The University will not withhold federal income taxes from benefits payable under this Plan; however,
benefits under the Plan are subject to FICA, state and city taxes.

Please note, any discussion of taxation contained in this "Tax Treatment" section, or anywhere else in the Plan has been provided for informational purposes only. The tax treatment of your Plan benefits will depend on a number of factors, including your individual tax circumstances as well as the timing and nature of your individual Qualified Adoption Expenses. The tax liability on any payments made under the Plan is the sole responsibility of each Eligible Employee. You are therefore advised to consult a tax advisor before electing to participate in the Plan.

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:  6/27/2024
Revised Date:  6/27/2024
Supersedes Policy Number(s): 413 (7/1/2009; 8/31/2011, 6/27/2024)
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

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