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Ok, so you will have to forgive me because I am sure that you have been asked this question a million times. But for some reason I just cant understand the adoption tax credit.
Ok, So lets say I adopted a child in 2010 and the cost was $20,000. Do I get back $13,000 in a lump sum check with our refund? We never have to pay the state or federal government, but always get money back at the end of the year.
This would be great because if were true then we would only basically be paying $7,000 for the adoption. Thanks for the advice:)
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Yes. If you finalized an adoption in 2010 or 2011, and had more expenses than the amount of the adoption credit, then you will receive the entire amount of the adoption tax credit in a lump sum check from the IRS.
It really is that easy.
If you finalize in 2012, the rules will be different. As it stands now you will NOT get the entire amount of the adoption tax credit in a lump sum check. So for others reading this, don't count your chickens before they're hatched!
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The NON-REFUNDABLE tax credit has been extended through 2012, but using the old rules that existed from the time the tax credit was created through the year 2009. The ones that say you only get the amount back that matches your tax liability.
The REFUNDABLE part of the tax credit only exists for adoptions in 2010 and 2011.
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ksflann
DianeS, I believe that you are wrong. The refundable tax credit is also for people who have credit carry forwards from previous years adoptions.