Information and Help for Adoptive Parents
Unique Adoptions is an adoption facilitator in Murrieta, CA, we offer help for adoptive parents with important information from tax credit to where to start with adoptions in Murrieta, CA. Our adoption service strives to provide you the best adoption help and answers all of your questions.
Federal Adoption Tax Credit NOTICE
This is not legal advice and should not be relied upon without first consulting your adoption attorney.
This adoption tax credit is more valuable than a tax deduction because it provides help for adoptive parents and allowable expenses are subtracted dollar for dollar against your tax liability. For example, if you owe $5,000 in federal taxes and have $3,000 in qualified adoption expenses, your tax bill is reduced to $2,000. If your tax bill is smaller than the credit, the unused portion of the credit may be carried forward for up to five years.
According to IRS Publication 968, qualified expenses include “reasonable and necessary” adoption fees, attorney fees, and some travel costs, including necessary transportation, meals, and lodging. Expenses related to surrogate parents or adopting a spouse’s child do not qualify for the credit. The credit also does not apply to expenses reimbursed by the government or private programs or for which an income tax deduction or credit already is allowed. Adoptive parents should carefully review the IRS guidance, preferably with a tax professional, to clarify what expenses qualify for the credit according to IRS guidelines.
Adoption Tax Credit (contributed by Mark McDermott from the American Academy of Adoption Attorneys; Susan Stockham from the American Academy of Adoption Attorneys; and Mike Roush, Lobbyist for the American Academy of Adoption Attorneys)
The adoption expense tax credit and the exclusion of income from employer adoption programs were modified and made permanent as part of the tax bill signed by the President on June 7, 2001. Below is information that provides help for adoptive parents explaining the changes to the adoption tax credit. The answers are based on past IRS guidance and best conjecture and do not reflect official Treasury Department policy since the IRS has not had a chance to issue new guidelines.