Tax Credit

Note: The information below is only for informational purposes. Friends of Adoption cannot give financial advice.We recommend that you consult a qualified tax and financial professional regarding your eligibility when filing for the Adoption Tax Credit.

In the past, the adoption tax credit was not refundable, which meant that your ability to take advantage of the credit was affected by your tax liability. If you could not use the credit the year you finalized, you could carry it over for up to five years. In 2010, the credit became refundable, so adopters in 2010 and 2011 can use the full credit regardless of
their tax liability. Those who adopted from 2005 to 2009 can carry the credit forward into 2010 so they can now benefit from this refundability.

To be eligible for the federal adoption tax credit, you must:
*Have adopted a child (other than a step-child)
*Have a modified adjusted gross income within certain guidelines
*Either have adopted a child determined by the state to have special needs OR have qualified adoption expenses; children who have special needs qualify for the maximum tax credit
*You do not need to have worked or have income to benefit from the credit for adoptions between 2005 and 2011.

Search the websites below to learn more on how to file the adoption tax credit for 2010.

Adoption Tax Credit-About.com
Claiming the Federal Adoption Tax Credit for Special Needs Adoptions
IRS.gov