Is Surrogate Money Taxed?

Being a surrogate means providing a life-changing service of helping others achieve their dreams of parenthood. As with any valuable service, you deserve to be compensated. 

When tax season rolls around, understanding whether surrogate pay is taxable is important in ensuring you've completed all necessary paperwork. We’re here to help you navigate the complexities of surrogate pay to help you earn the highest compensation for your family.

To learn how much surrogate salary you qualify for, contact us online now or text 913-204-0224 to speak with a specialist.

If you've completed your surrogacy journey already and think you may want to help another family bring their child into the world, contact us online or by phone.

Is Surrogate Money Taxed?

Surrogacy compensation is unique. It’s not your typical income, and there’s no clear-cut legal precedent. Unfortunately, there are no court cases to guide gestational carriers on the best path regarding taxes.

The tax treatment of surrogate compensation depends on how it's structured in your contract and your state's laws. Generally, you must report income if you were issued a 1099-MISC form. As an agency, American Surrogacy does not issue 1099s to surrogates. However, this doesn't automatically mean your compensation is tax-free. We recommend consulting a tax professional.

“In some cases, you may be taxed on the income depending on how it’s listed in your contract — or you may not be taxed at all," said Tasha, one of our surrogacy specialists. "For example, some people have it listed in their contract as a gift, and their state is okay with that. In other cases, it’s considered compensation for the time, energy and everything their body goes through, so it’s taxed for that reason. Talk with a tax specialist and your attorney to fully understand whether you need to set money aside for taxes later on."

Why Would Surrogates Need to Pay Taxes? 

Surrogate pay may be considered income for several reasons. First and foremost, it represents compensation for a valuable service provided by the gestational carrier.  

As a surrogate, you undergo physical and emotional challenges during the pregnancy, and your commitment to helping intended parents build their families is commendable. When structured as compensation for services, surrogate pay may be subject to taxation just like other forms of income. 

Remember: Consulting a tax professional is crucial to ensuring compliance with tax laws.

What Records Should You Keep for Tax Purposes? 

Proper record-keeping is essential when it comes to surrogate compensation. This will make it much easier when you consult with a tax professional and ensure you have everything needed. 

Keep copies of your complete surrogacy contract, especially sections that detail how your compensation is structured and classified. This documentation shows whether payments are listed as gifts, compensation for services or other arrangements. Also maintain records of all payments you receive throughout your surrogacy journey, including dates, amounts and the source of each payment. 

Save any tax forms you receive, such as 1099s. Additionally, keep receipts for any tax preparation services or consultations with tax professionals, as these may be deductible expenses. Having well-organized records will save you time and stress later.

What Does Surrogate Salary Cover?

Our surrogate income package will increase your income and cover your  legal, medical and travel expenses throughout your surrogate journey. 

Get the Surrogate Salary You Deserve

Surrogate income is about recognizing the incredible dedication you’ve shown in helping another family’s dream of becoming parents come true. We’re committed to ensuring you receive the highest amount of compensation possible for your invaluable contribution to this life-changing journey.

“We’re very open to getting on the phone, talking through the differences in what we offer and also discussing what you’re looking for in terms of compensation," said Brittany, another surrogacy specialist.

Through our unwavering support and comprehensive services, becoming a surrogate with our agency has never been easier. Fill out our contact form or text us at 913-204-0224 to start your surrogacy journey.

Disclaimer: This information is not legal advice. Always consult with a tax professional for accurate guidance based on your specific situation.