Does anyone know if new presidency will affect the adoption tax credit?

The adoption tax credit increased with passage of the Hope for Children Act in 2002. It's actually the act that will expire in 2010, not the adoption tax credit. The credit will revert to its former amount, $5,000. As far as the maximum carryover amount, I believe that it would be based on the tax code that was in effect the year the credit was initially claimed. But I would have to research further. :coffee:

I've posted this before, and I will again...I can't say it for sure, only that it's the opinion I've gotten from others who have been involced in adoption for longer than I have (anyone else here that can weigh in) I have heard that the average cost of adoption basically rose almost the exact amount that the adoption credit went up. The tax credit is something that every agency is aware of and most take into consideration almost automatically subtracting it when they figure what the adoption would "really" cost a family. I strongly believe that if the credit expires, or reduces back to 5K that prices will adjust accordingly. The bottom line is adoption has to be something that people can afford or they won't adopte privately. Many people could not adopt without the financial assistance of the tax credit. Agencies are much more likely to make less of a profit, but complete adoptions than they are to keept their prices the same and have a far reduced pool of families. JMO :)

I hope you are correct. I'm more jaded about the idea that agencies will actually reduce their fees. People generally don't like to charge less for services when they have historically received more.

But what about those of us who adopted recently, and whose adoptions will be finalized in 2009, meaning we can't claim anything until we do our taxes in 2010? That's what worries me. I hope the tax credit stays!

From what I have researched if you FINALIZE before Dec 31, 2010 then you will still get the tax credit that you qualify for today. You will still have subsequent years to claim it b/c of the date of your finalization was on or before Dec 31, 2010. if you are in mid process (placement but not finalized) before Dec 31, 2010, then you will be subject to what ever takes effect starting Jan 1, 2011. As far as president, I dont really think that matters. This will be decided on by congress and based on who is in there now...don't count on it sticking around. Its my belief we are going back to the $5K credit. And I don't think many adoption agencies are going to reduce costs. take a look at the voting record... [url=http://projects.washingtonpost.com/congress/110/senate/narrow-margins/]Senate votes with narrow margins | Congress votes database | washingtonpost.com[/url] (its session 1 roll call 268 (the second or so item down with "adoption" in the title)). After it opens you can click on "democrat" or "republican" and it will expand and give you a list of who vote what...

Thank you Jenn!

My DH and i are adopting from foster care. We currently own a 3 bedroom/2 bath house. My husband is a writer and needs a home office, which takes up one of the bedrooms. We would like to adopt a sibling group. The size of the sibling group depends on the size of our house and the number of bedrooms. We can add a bedroom to our current house (and a bath) for approximately $40-50K. i would love to adopt a sibling group of 3-4 children, but we would have to have that larger tax credit to build onto the house. Without the expansion, we would have to move at about the same cost. Plus the cost of a minivan, furniture, etc etc that the tax credit would certainly help. We can still adopt without the tax credit. But we could not adopt more than 1-2 children. If my scenario is fairly typical of those who would adopt from foster care, and i think that it is common enough to make mention of, less people will adopt large sibling groups from foster care. Sibling groups will be broken up, which can aggravate attachment disorders, less kids will be adopted, which will be a burden to the taxpayers in the long run one way or another. i don't think it's a zero sum issue. Maybe, maybe not, when only private agency adoptions are considered. But that group is not even the primary target for the tax credit; it's the special needs kids who are.

To my knowledge you can not claim the credit for foster adoption can you? You can only claim the credit for expenses you have actually paid out...I think? So I guess I don't see how the larger credit would help build an addition or anything...foster care adoptions cost very little or nothing at all. Expenses should be reimbursed by the state for the most part, not through the tax credit. I'm just starting out in foster care, so maybe I'm completely wrong, but I did not think you could claim the full credit unless you had paid that much money out in expenses... EDIT: Wow...just wanted to add that I found this... Adoption Tax Credit: The tax relief bill that the President signed last year permanently extends and increases the adoption tax credit from $5,000 per child to $10,000 per child for qualified adoption expenses. For special needs adoptions, it increases the credit from $6,000, for qualified adoption expenses, to $10,000, regardless of expenses. sounds like the increase to at least 10K is "permanent"...whatever that means. I'm sure they could sign a new bill that reduced it. Also found that if your child receives subsidy, they are considered special needs and you can claim the credit regardless of if you paid $ out. Is that seriously true? Can anyone confirm that? That is insane. That is honestly hard to believe. Then again, once you have a few kids, Your tax liability is so far reduced, I doubt you could use the credit anyway...but still...that's interesting. Okay, end ramble....

Aclee, my friend recently adopted from foster care (a son she had fostered) and could not claim any expenses because she did not have any (in other words, in our state at least, you are right). Maybe in some other states parents have to pay expenses to adopt from foster care?

For special needs adoptions you can claim 10,000$ no matter if you spent it or not. Most foster adoptions would be considered special needs in *some* states. Also - you can claim ALL expenses, which includes a lawyer to finalize, meals, gas, etc expenses that have to do with your adoption. so it's more than just agency expenses. KWIM?

Aha! Thank you, Vogi. Aclee, I wonder if race is "special needs" here (though I hope not for various reasons, if it meant helping you adopt, I am all for it!).

While generally there are minimal to no fees associated with foster care adoption, there are some. And don't forget too, not everyone who adopts from foster care goes directly through the state's services to complete that adoption and do use adoption agencies. Aclee - I'm curious to know why you think it's insane that a tax credit is given when a subsidy is involved? Sounds almost judgemental but I'm sure you don't mean it that way.:)

Aclee - I know with my parents they could have used the 10,000 plus thier subsidy seems how my sister uses WAY more money than they get from the state. The subsidy is laughable, but they do appreciate it. Just thier house expenses alone (they had to build a custom house for my sister's wheelchair to fit, plus all the lifts, etc) would be MORE than triple the 10,000. My mom actually felt so bad getting her subsidy upped, she didn't even know she got any money until after my sister's adoption, and then her SOCIAL WORKER was the one who told her she needed to push for more because what she was getting was ridiculous. I know it seems like a lot, but it IS a huge help to a lot of people.

It is true (that special needs adoptions are eligible for the full credit regardless of expenses), and it is NOT insane! Special needs kids are usually defined by age, medical status, and sibling group status, and race. Race shouldn't have much to do with expenses, but age, medical status, and sibling group status certainly will. Most children from the foster care system will have problems that require counseling, sometimes occupational or physical therapies. Medical problems will cause additional medical expenses as well as therapies and such. Sibling status causes more of everything including a bigger home, bigger cars, as well as the above. The subsidies help, but they certainly don't cover all of the extra expenses that a special needs child will incur. The point in my situation is that my husband and i can adopt from foster care without any subsidies, and we could adopt from an agency without subsidies. But we would only be able to help one or two children, most likely. If they offer us the tax credit, we can help more children by adding on to our home. We are not poor, but the adoption subsidies would help us. You can say, "Well, you're middle class so you should be able to afford it without help." And that's true; we can. But we can't afford to help as many. And that's one demonstration of why the tax credit may help special needs children in foster care possibly more than domestic or international agency or private infant adoption. And remember that if we don't adopt that larger sibling group, they sit in foster care that much longer and may need that much more therapy. It's harder to place an older child (which they'll become as they sit in foster care longer), and when they age out, they tend to place more burden on the taxpayers than when they find permanent placements. In the end, it's probably a good investment for the government to offer that tax credit! And, of course, it's just the right thing to do.

Fredalina, I wish you the best. It's folks like you and your husband that keep me believing that, together, we can accomplish so much.