Embryo Adoption under Section 137

[pcbenefits007]

Wondering what other practitioners' thoughts or experiences are on how expenses of the adoption of an embryo could apply under an Adoption Assistance program under Code Section 137?

[Belgarath]

Interesting question. Experiences? None. Thoughts? I would never go down the rabbit hole as to when an individual is "born" or "legally adopted" for purposes of this question in the context of either a cafeteria plan or a qualified plan. LEGAL COUNSEL all the way! My preferred choice is not to allow the QBAD's in a plan to start with, although your situation is probably rather uncommon.

[CuseFan]

One (not me) might take the SCOTUS decision and argue personhood and apply that reasoning, or maybe argue the laws of their state grant that right, I'm sure someone with a lawyer who wants a lot of national publicity will venture down that rabbit hole at some point. We're already seeing pregnant women challenging tickets for using HOV lanes on that basis, just another can of worms. It's getting to be a crazy new world.

[Brian Gilmore]

First time I've run into the issue also, but I found a couple interesting posts discussing the issue from the adoption tax credit perspective here: 

• https://embryoadoption.org/2020/04/adoption-tax-credit/
• https://ttlc.intuit.com/community/tax-credits-deductions/discussion/can-we-claim-adoption-expenses-for-an-embryo-adoption/00/442400

In short, it seems like a very unsettled area with varying results depending on state, timing, etc.

I would assume the Section 137 adoption assistance exclusion rules would generally follow the adoption tax credit rules for this purpose.

[Luke Bailey]

10 hours ago, pcbenefits007 said:

the adoption of an embryo

How would you do this? You mean like in a surrogate pregnancy? 137 does not include expenses of surrogacy. See IRC Sec. 23(d)(1) incorporated into 137 by 137(d).

[Brian Gilmore]

It's not surrogacy.  It's adoption like you would would adopt a child post-birth, but in this case adopting the child pre-birth in embryo form--typically from donated embryos created for IVF purposes but not being used by the biological parents.  The embryo is implanted into the adoptive mother's uterus (like in traditional IVF), and the adoptive mother carries the embryo to birth.

Here's a summary: https://consideringadoption.com/adopting/types-of-adoption/what-is-embryo-adoption/

[Luke Bailey]

21 hours ago, Brian Gilmore said:

It's not surrogacy.  It's adoption like you would would adopt a child post-birth, but in this case adopting the child pre-birth in embryo form--typically from donated embryos created for IVF purposes but not being used by the biological parents.  The embryo is implanted into the adoptive mother's uterus (like in traditional IVF), and the adoptive mother carries the embryo to birth.

Here's a summary: https://consideringadoption.com/adopting/types-of-adoption/what-is-embryo-adoption/

Interesting. So it seems likely that the links you provided earlier, Brian, would be correct that would depend on when adoption occurred under state law and then would qualify.