Adoption Tax Credit Tidbits

Adoptive Applicants often wonder about the "Adoption Tax Credit".  Families Supporting Adoption has been wondering about it as well.  A forum was held a few weeks back and one of the attendees wanted you all to know the basics.  Hopefully as advocates of adoption you are all aware of the important role you can have in advocating for adoption in regard to legal matters in your own area.  Get involved with adoption related issues whenever possible to advocate for legislation that supports adoption. Hopefully you will find these tidbits interesting!

Some highlights from the forum:

Form 8839 with Qualified Adoption Expenses must be included with the return.

The return must be submitted in paper form by mail. Electronic filings are not accepted and will slow down the process.  It is quite common for those who take advantage of the Adoption Tax Credit to be audited. 

For Tax year 2011 Adoption Tax Credits:

·         $13,170 credit limit
·         Are Refundable
·         All adoption types are eligible

Starting in with tax year 2012 the Adoption Tax Credits:

·         Are Non-refundable
·         Decrease to $12,650 credit limit
·         All adoption types are eligible

For Tax year 2013 the Adoption Tax Credits:

·         Are Non-refundable
·         Decrease to $6,000 credit limit
·         Are For Special Needs adoptions only