Adoption Credit

Adoption Credit

In U.S. tax law, a direct dollar-for-dollar reduction in one's tax liability for each child under the age of 18 that a taxpayer adopts. The adoption credit is intended to reimburse the taxpayer for attorney's fees, court costs, and traveling expenses. The credit is non-refundable, but if the amount of the credit exceeds one's tax liability, it may be carried forward for up to five years. The maximum amount of the adoption credit is adjusted for inflation. See also: Carryforward.

Adoption Credit

A nonrefundable credit for qualified adoption expenses incurred for each eligible child. The limit on the credit is indexed to inflation. For current figures, see our Adoption Assistance rate table. The limit is a per-child limit, not an annual limit. Any unused credit can be carried forward for five years or until used. For special needs children the full credit is allowed, regardless of the amount of actual expenses.
References in periodicals archive ?
The adoption credit became refundable for the first time in 2010.
B loses the adoption credit because a married same-sex couple cannot take an adoption credit when one spouse legally adopts the other spouse's baby.
Current tax credits include the credit for child and dependent care expenses, education credits, the foreign tax credit, the retirement savings contributions credit, the child tax credit, the adoption credit, the plug-in electric vehicle credit, and residential energy credits.
A few exceptions apply, including the adoption credit (Sec.
Families wishing to claim the adoption credit should visit www.
The Government Accountability Office was recently asked to describe the IRS strategy for ensuring compliance with the adoption credit for the 2011 filing season, assess the IRS related communication with taxpayers and stakeholders, and assess its processing and audit of claims.
By contrast, the full amount of the adoption credit is allowed to taxpayers adopting a special needs child regardless of the amount of qualified adoption expenses paid by the taxpayer.
3) Indexing also applies to the additional standard deduction for the blind and elderly, the adoption credit, the exclusion for employer-provided adoption assistance, and the threshold income levels for: phaseout of personal exemptions; phaseout of the savings bond interest exclusion; phaseout of the deduction for interest on a qualified education loan; phaseout of the adoption credit; phaseout of the exclusion for employer-provided adoption assistance; and the ceiling on itemized deductions.
But beginning in 2010, the only nonrefundable personal credits available to offset both the regular income tax and the alternative minimum tax are the nonrefundable adoption credit, the nonrefundable child tax credit, and the saver's credit.
Usually, the only nonrefundable personal credits that can be used to offset both regular tax and AMT liability are the child tax credit, the adoption credit, and the retirement savers credit.
Most of these changes relate to recent tax legislation for the Alternative Minimum Tax (AMT), (1) mortgage debt relief, (2) deductions for charitable cash contributions, (3) and a number of credits including the Hope and Lifetime Learning Credit, (4) Adoption Credit, (5) and Earned Income Credit.
The Web page provides information and links regarding DOD's Adoption Reimbursement Program, military leave and the Internal Revenue Service Adoption Credit.

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