employer adoption reimbursements

My husband & I work for the same company. We're very fortunate to each get $10,000 towards adoption expenses. (Reimbursed after the fact) We also both get two weeks paid leave. Doesn't make the process go any faster though :-(

We just applied for ours - since we finalized!! $10K from DH's company, and $3K from mine. Basically pays for the adoption.... Interesting to note that you are still entitled to the tax credit, even if you get the assistance... AWe-some!!!:cheer: :clap: :clap: Mega

that is awesome. my husband a co-worker who adopted a little boy approached his company but they wouldn't even consider adding this employee benefit. please count yourself blessed if your employer is this generous.

We didn't even realize that my DH company offerred this. We were reimbursed $5000. I work for a University so they didn't have the same benefit, but gave me 6 weeks paid time off. That was really cool!

Here is something to remember on the adoption tax credit and adoption assistance from your employer. If your employer pays $10,000 toward your adoption and your total eligible expenses are $10,000, you can't use the adoption credit. If your employer pays $10,000 toward your adoption and your total eligible expenses are $15,000, you can use only $5,000 of the tax credit. In other words, your total employer assistance and tax credit can not exceed your actual expenses. I hope this makes sense. Kevin

Kevin, that's a good point. However, keep in mind that EVERYTHING you pay for toward the adoption is included in the total expenses toward the employer reimbursement and tax credit. Airplane tickets, hotel stay, food while in China. And other expenses that are not considered money given to the adoption agency....notary expenses, fingerprints, background clearances. When you add everything up, it can be close to a total of 25-30,000. Even with a great employment plan, most people would still qualify for all of the tax credits. Just keep all receipts for adoption preparation and expenses while in China.

I think your right Karen. The adoption is expensive enough that most people who get employer assistance will have enough eligible costs to cover both. We just have to do a good job of tracking costs and keeping receipts. Remember, the IRS does not count a canceled check as a receipt.

I beg to differ, but you can apply for the entire tax credit - even if you are given adoption benefits at work. H&R Block confirmed it, it was a separate law passed.... Look it up.

WOW that's great news! Our first adoption was finalized in March 06, and at that time (taxes for 06) it had to be itemized for less than the amount given back by the employment reimbursement. We still qualified for the entire tax credit. But this is still great news. When did the law change on this? Are you sure you're talking about IA, or is it only for domestic adoptions that the law is changed?

I am not sure, but that is why we have someone do our taxes for us. The first year we even took the "piece of mind guarantee" in case they were wrong, but they were not. Maybe look for info on the dave thomas web site....?? Good luck!

Below is a quote from adoption.com's own page on the adoption credit. I have also included a quote from the IRS official website. This particular tax topic is dated November 4, 2008 on the IRS website. I am a CPA who has experience with taxes. I also checked my CCH tax guide (CCH is the single largest producer of tax research materials) and it said the same thing as the IRS website and the adoption.com page. I hope you are right about being able to take both for the same expenses. That would be a big benefit for a lot of people. However, it would be really unusual for the IRS to give the taxpayer a tax break for something their employer has already reimbursed. I can't speak to what H&R Block is refering to, but I would ask them to provide you with support. If you ever get audited, you could be subject to large penalties if they are wrong. Remember, most of the people working at H&R Block are not accountants and have only a few weeks of training. Adoption.com Site "You may claim both a credit and an exclusion for expenses of adopting an eligible child. For example, you may be able to claim a credit of up to $10,960 and also exclude up to $10,960 from your income. However, you cannot claim both a credit and an exclusion for the same expense. " Per the IRS Website: Topic 607 - Adoption Credit

You may be able to take a tax credit for qualifying expenses paid to adopt an eligible child (including a child with special needs). The adoption credit is an amount subtracted from your tax liability. Although the credit generally is allowed for the year following the year in which the expenses are paid, a taxpayer who paid qualifying expenses in the current year for an adoption which became final in the current year, may be eligible to claim the credit on the current year return. The adoption credit is not available for any reimbursed expense. In addition to the credit, certain amounts reimbursed by your employer for qualifying adoption expenses may be excludable from your gross income. Kevin