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I thought I had it figured out, but recently read something that confused me all over again. Here is a scenario. If someone who understands the credit can read my scenario and explain what would happen I would be very appreciative.
Example:
DH and I owe $9,000 in taxes for the year
We paid $10,000 in taxes for the year
The adoption tax credit is $12,000
Assume that we will qualify to the entire credit based on income and adoption expenses.
How will this work for us?
In this scenario, I think that we will only get the $9,000 back in addition to the $1,000 we would get back anyway right? If this is the case, can we get the other $3,000 back the next year?
I am so confused and the IRS site did nothing to help me.
Thanks!
That's exactly right. The credit carries over for up to 5 years, for others whose liability is much less. Ours, for example!
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Yes you are correct. You would get the $9000 credit plus the $1000 back. The $3000 will carry over to next year (you can carry over any remaining amount for 5 years).