It is the intent of the Indiana Wesleyan University Adoption Reimbursement Policy (the “Policy”) to provide reimbursement for Direct Expenses for the adoption of a child of a Full-Time Employee of Indiana Wesleyan University (the “University”). “Direct Expenses” are defined as reasonable and necessary adoption fees, court costs, attorney fees, traveling expenses (including meals and lodging) while away from home, and re-adoption expenses relating to the adoption of a foreign child which are paid directly by the Full-Time Employee for the adopted child and which are:
directly related to, and the principal purpose of which is for, the legal adoption of an eligible child by the Full-Time Employee;
not incurred in violation of State or Federal law;
not incurred in connection with the adoption of the Full-Time Employee’s step-child (a child of the employee’s spouse) or in carrying out any surrogate parenting arrangement;
not already allowed as a deduction or credit under another tax rule, and
not reimbursed by family members, agencies, State or Federal or local programs, insurance carriers or benefit plans or by any means other than the Policy.
Furthermore, any expenses of the birth mother or any other expenses not that of the adopted child are not covered.
All Full-Time Employees of the University are eligible to participate. A Full-Time Employee will be reimbursed for Direct Expenses incurred in the adoption of a child (“Adoptee”) in an amount not to exceed $4,000 per adoption, which will be reviewed annually. In order to receive the benefit, the Adoptee at the time of adoption must be a child under the age of 18 and eligible to be claimed as a dependent of the Full Time Employee for federal income tax purposes following the adoption. The above benefit shall be available for no more than 2 adoptions for the lifetime of each Full-Time Employee and any spouse of such Full-Time Employee, regardless of whether such spouse is also employed by the University at the time of adoption, or has previously been employed by the University in the past or will be employed by the University in the future.
The Full-Time Employee must, within 60 days of the final adoption decree, provide documentation satisfactory to the University:
that the adoption is final (information identifying the birth parents may be masked when documentation is provided);
that the expense incurred in connection with the adoption meets the definition of Direct Expense, as defined herein; and
that all eligible Direct Expenses were incurred after the Full-Time Employee’s date of employment.
Reimbursement requests shall be submitted to the Human Resources Department on the Adoption Reimbursement Request Form along with all applicable documentation.
Coordination with Leave Policies
The Family and Medical Leave policy provides eligible employees with up to twelve (12) weeks of unpaid leave for qualifying events, including adoption (see employee handbooks for more information about FMLA). Employees are required to utilize all paid leave time prior to going into an unpaid status. Employees are requested to provide their manager with as much preliminary information on need for time off as early as possible. Though many adoptions are unpredictable as to when they occur, in many cases this will prevent unplanned interruptions in departmental workflow while allowing employees to take necessary leave time.
Taxation of Benefits
This Policy is intended to satisfy the conditions of Section 137 of the Internal Revenue Code of 1986, as amended (the “Code”). As such, the Policy does not discriminate in favor of highly compensated employees. According to Code Section 137 and the regulations and guidance there under, the amount the Full-Time Employee receives as reimbursement for Direct Expenses is excluded from the Full-Time Employee’s gross income for purposes of federal income tax, except as limited below; provided, however, other applicable taxes and liabilities (such as Social Security, unemployment and State income taxes) shall be withheld from the reimbursement amount. Code Section 137 limits the amount that may be excluded from gross income for certain persons. The amount that may be excluded from gross income shall be reduced or eliminated if the Full-Time Employee’s adjusted gross income (as modified by Code Section 137(b)(3) exceeds $150,000. Each Full-Time Employee who participates in the Policy should consult his or her tax advisor for more information on the tax treatment of the reimbursements he or she receives under the Policy and whether a tax credit may also be available.
This policy applies to all the employees of the University.
17-Mar-2015 - Date conversion to KB
Employee Policy 300.04.01
Executive Director for Human Resources
Vice President for Business Affairs/ CFO