The Adoption Tax Credit Impacts Families from 2005-2009
Little Miracles International
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Sunday, December 19, 2010
From Voice for Adoption (VFA – develops and advocates for improved adoption policies)
Did you know?
The federal adoption tax credit was made refundable for the first time! Meaning you can claim it for a refund even if you owe no taxes. Families who adopt a child with special needs from foster care can claim the credit without needing to incur or document expenses. The credit per-child is now $13,170 for adoptions finalized in 2010.
Now that the credit is refundable many more families will benefit; even families who adopted earlier than 2010, but didn’t have enough tax liability to access the credit in previous years. Families that finalized adoptions in 2005-2009 can carry forward unused tax credit to their 2010 return and claim it as a refundable credit. Be informed when preparing your taxes or visiting your tax consultant this year, visit the resources listed below.
Since this is fairly new, some tax consultants may not be aware of the changes; help to educate them of the recent updates to the federal credit by referring them to the IRS instructions for Form 8839 and NACAC’s fact sheets. To learn more about the adoption tax credit and how it might benefit your family, visit the following resources:
(You will notice that this currently links to the 2009 forms; the IRS will update the forms to 2010)
* The adoption tax credit has been extended through December 31, 2012.
* The refundability of the adoption tax credit will remain in effect for 2011.
* The refundability expires on December 31, 2011 and will not be available for 2012.
The full text of the law can be found in Section 101 of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010.
I like that very much!