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The Adoption Tax Credit, which was scheduled to expire in 2010, has been extended for one year, through 2011. The Adoption Tax Credit will see several positive adjustments, as confirmed by Joint Council on International Adoption Services:
The maximum credit will increased from $12,150 to $13,170,
The Adoption Tax Credit is now retroactive to January 1, 2009. This represents a potential increase of $1,000 for adoptive families.
The Adoption Tax Cred was made refundable. If a family has no tax liability, the IRS will refund the amount due.
Please consult a tax professional for all of your tax questions.
The extension of the Adoption Tax Credit through 2011, was passed as part of the health care reform bill which was signed into law by President Obama on Tuesday, March 23, 2010. The changes have been published in detail by the Journal of Accountancy:
"For 2010, the maximum adoption credit is increased to $13,170 per eligible child (a $1,000 increase). This increase applies to both non-special needs adoptions and special needs adoptions. Also, the adoption credit is made refundable. The new dollar limit and phase-out of the adoption credit are adjusted for inflation in tax years beginning after Dec. 31, 2010. Also, the scheduled sunset of EGTRRA provisions relating to the adoption credit is delayed for one year (i.e., the sunset becomes effective for tax years beginning after Dec. 31, 2011).
For adoption assistance programs, the maximum exclusion is increased to $13,170 per eligible child (a $1,000 increase). The new dollar limit and income limitations of the employer-provided adoption assistance exclusion are adjusted for inflation in tax years beginning after Dec. 31, 2010. The EGTRRA sunset of provisions relating to adoption assistance programs is also delayed for one year (i.e., the sunset becomes effective for tax years beginning after Dec. 31, 2011)."
- Journal Accountancy, March 22, 2010
Thank you to each family that lobbied for the Adoption Tax Credit by making your voice heard at both the state and federal levels! This is great news for adopting families across the US, making adoption possible for many that could not otherwise afford to build their families through international adoption.
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I've heard that it can be a bit of a wait for adopting Bulgarian children so if we start the adoption process - pay for homestudy, agency fees, etc... but don't actually finalize the adoption 'til 2012 or 2013 or something like that - would we still be able to claim what we did spend for this year? ?? Anyone know? And if it's only extended through this year does that mean there will be possibly NO tax credit for the next year 2012?
It is only for the year your finalize your adoption. Take a look at this link. [url=http://taxes.about.com/od/deductionscredits/qt/adoptioncredit.htm]Adoption Tax Credit - How to Claim the Adoption Credit[/url]
I don't know if it true or not, but is is stating that they have extended the tax credit through 2012, not 2011 and then it will end.