Tax Credit

I had similar questions and asked our accountant. Here is how I THINK it works-very simplified. You get the tax credit the year the adoption is finalized, I think it generally works much like a tax refund on what you have already paid. If baby is placed in December and the adoption doesn't finalize until January I beleive you must file for the year the adoption finalized and can't use it for the year baby was placed. Also this is money you would already be paying in taxes, if you don't have a tax liability you don't get the tax credit. If you also don't have a $10,000 tax bill but have spent $10,000 or more you can split it up over 2 years so if you owe $5,000 taxes over 2 years you basically won't pay taxes or you get it all refunded to you. (Please contact an accountant because like I said I could have misunderstood and I am by no means great at this tax stuff and got my only "C" in college accounting!)

Thanks for your help!

thats how it seemed to us, but you can apply it over several years if I remember right...

I am also no accountant, but Forever_family's repsonse is exactly how I understand it and how we used it the first time around. Some states also offer a deduction or credit for taxes. In Utah, you can get the deduction either the year the money is spent, or the year you finalize.

and both said that the tax credit can be taken over a period of 3 years (as long as you don't go over the 10,000). Good luck.