Congress recently enacted a tax credit aimed at helping ease the financial burden of adoption. Though the credit applies to both foreign and domestic adoptions, parents adopting domestically may get the credit sooner.

"People who adopt in the USA can claim a credit for adoption-related expenses in the year the adoption is completed or the year after they apply, even if it is still pending. But parents who adopt a non-U.S. child can claim the credit only in the year the adoption is completed."

Because of increased regulations in many countries, foreign adoptions take longer than they used to. Additionally, an unsuccessful foreign adoption isn't eligible for any portion of the credit, while an unsuccessful domestic adoption may be. Source: USA Today

Labels: financial_assistance, tax_deductions

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Tax credits are available in 2008 to help parents offset the cost of adoption. An $11,650 credit is available to cover "qualified adoption expenses." Adoptive parents can also deduct up to $11,650 of expenses paid by an employer.

"To qualify for the credit for the exclusion, the expenses must be 'qualified adoption expenses.' These are the reasonable and necessary adoption fees, court costs, attorney fees, traveling expenses (including amounts spent for meals and lodging) while away from home, and other expenses directly related to the legal adoption of an 'eligible child.'"

Surrogate parenting is not included in the tax credit, nor is adoption of a spouse's child. Expenses associated with an unsuccessful adoption attempt may also qualify. Source: Ft. Collins Coloradoan

Labels: adoption_costs, tax_deductions, credits

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The news is filled lately with celebrity adoption stories. The stories can make "average" families feel as though adoption is out of reach for them. But adoption is a viable option for nearly anyone.

"Often people say that they do not think they can afford to adopt. Initially the cost seems a bit overwhelming to many folks, but once it is broken down into manageable parts, it is doable for most working families..."

Income requirements are "liberal" for adoptive families, and substantial tax credits are also available. In addition, adoption is no longer limited to the traditional two-parent family but has opened up to single parents and - in some cases - gay and lesbian couples. Read more at Times-Standard.com.

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Labels: adoption costs, options, tax_deductions

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Tax credits of up to $10,960 are allowed for those who are trying to adopt. The amount is the same whether you're adopting internationally or from within the United States.

"If the child is a U.S. resident or citizen, you can claim the credit on the expenditures whether or not the adoption becomes final. You only receive a credit for a foreign child in the year the adoption become final."

Expenses that can be counted toward the deduction include: court costs, traveling expenses, and adoption fees. Read more at BankRate.com.

Labels: adoption costs, tax_deductions

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Tax returns for 2006 are due tomorrow. For those who will be finalizing their adoptions in 2007 there's some good news; the Federal government has increased the Adoption Tax Credit to $11,390 for people whose adoptions are completed this year.

"The... maximum is the amount of qualifying expenses taken into account over all tax years. If you've been trying to adopt the same child for more than one year, your credit will be reduced by the amount of expenses taken into account in previous years for the same adoption effort."

Though you should consult a tax professional, the above rule typically only applies to domestic adoptions. If the child you're adopting is a U.S. citizen, you can claim deductions before the adoption is final. With most foreign adoptions, however, you have to wait until the entire process has been completed. Read more at LauraChristianson.com.

Labels: adoption_costs, tax_deductions

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For many loving and able parents, money is the biggest obstacle to overcome when they’re considering adoption. The U.S. government offers a tax credit aimed at helping potential adoptive parents, and improvements to the credit have recently been made.

“With the new changes, if your adoption costs exceed the allowable limit, the difference will show as a credit on your income tax. An additional benefit is that the tax credit is reimbursed dollar for dollar. You can also take the credit if the adoption isn’t finalized. The credit can be carried forward for up to five years, if need be, or until it’s used, whichever comes first.” [Source: PR Web]

In addition, the tax credit has been extended to December 2011, and the changes have been made retroactive to January of this year.

Labels: laws, tax_deductions

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