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Hello,
My DH and I are out 5K in agency fees. More specifically, a family activation fee. We have been an agency for about four months. They claim to have a waiting period of two weeks before a match is made. Our profile hasn't been shown to one birthparent yet. My question is 1) Can we claim the family activation fee on our taxes in April? Can we get reimbursed without a match? 2.) We are strongly thinking about changing agencies due to the lack of communication, and really want to get reimbursed for the money we have already given to this agency... Does the 5K act as one adoption attempt without a match being made?
Thanks!
Dana
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The federal adoption tax credit can be claimed EITHER:
In the year the adoption became final
-or-
In the year AFTER the expense was paid.
So, if you pay an expense in 2010 (but don't have a finalized adoption in 2010), you can claim it on your 2011 taxes (the ones you file in April 2012).
Hope that helps!
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Yes, the IRS does not care at all about matching. They don't care how far along you are in the process, they only care about the year you paid expenses and the year you finalized an adoption. Matching is irrelevant to them. You could even stop the process entirely and decide not to adopt at all, and you could still claim the expenses, as long as you wait until the year after you paid them to claim them.