Adoption Tax Credit Question

In order to benefit from the Adoption Tax Credit (or any tax credit, honestly), you must fulfil the requirements of the credit during the time the credit is active. There are two time periods given in the Adoption Tax Credit law for claiming expenses (for a domestic adoption). One provision allows parents to claim expenses in the year the adoption was finalized. The other allows parents to claim expenses in the year after the expense was paid regardless of whether the adoption is finalized yet. Obviously if you intend to claim expenses in the year the adoption was finalized, you must finalize before the credit expires. But what is still in doubt is whether expenses incurred while the law was active - but claimed after the law was expired - will be allowed. Meaning, if the law is in effect in year A, but expires at the end of it, and you have expenses in year A but don't finalize until year B - can you claim those expenses on year B's taxes? You certainly could do so if the law was still in effect in year B, but whether you can when the law expires at the end of year A is what we do not yet know. And we won't know until it is upon us and the IRS releases the forms and Q&As for that year. I doubt that attempting to adopt internationally will be of any benefit to you. International adoption tends to take just as long - sometimes longer - than domestic adoption does. In domestic adoption you possibly could be matched as soon as you have a completed homestudy, and the baby could be born already or in a matter of weeks, and you could take the child home immediately and finalize in the typically-required 6 months. However, in an international adoption, you have to wait for much more paperwork to be done after the completion of the homestudy, which adds time. Then you have to wait for the country to match you with a child, which in most countries takes a few months. Then you have to wait for court dates in that country a few months after that, and then embassy dates, and visa dates, etc, etc, etc. Yes, the adoption is usually finalized in the other country, and that finalization is accepted here - but that doesn't mean it happens any faster. To anyone beginning the adoption journey now, I'd have to say your best bet to being certain to qualify for the adoption tax credit is to contact your congressperson and convince him/her to vote for further extension of the credit. Hope you got some good information from this. Post back if you still have any questions!

Ok thanks. : )

The adoption tax credit was extended through the end of 2011, not 2010. As long as you finalize by December 31, 2011, you can take the credit. I'm not sure if you can take it if you finalize after the deadline, but have expenses before the deadline.