Those who adopt children other than those with special needs must be able to document, if requested by the Internal Revenue Service, qualified adoption expenses
36C (5) and released Form 8839, Qualified Adoption Expenses
, for claiming the refundable credit on 2010 tax returns.
Qualified adoption expenses
include legal fees, court costs, attorney fees, and other related fees and costs that have the principal purpose of a taxpayer's legal adoption of an eligible child or a child with special needs.
IRC [section] 23 provides a credit for qualified adoption expenses
paid or incurred by a taxpayer.
The adoption credit is available to individuals who pay or incur qualified adoption expenses
in connection with the adoption of a child.
Second, taxpayers adopting an eligible child (64) can receive a credit for qualified adoption expenses
which include reasonable and necessary adoption fees, court costs, attorney fees, and other expenses directly related to the adoption of the eligible child.
Flexible Spending Accounts for Health Care and/or Dependent Care Reimbursement are available as well as adoption assistance for qualified adoption expenses
. Confidential counseling is available through our Employee Assistance Program and Life Matters provides a detailed, customized research and referral service.
A $10,000 credit is allowed in the year a special-needs adoption is finalized whether or not you actually have any qualified adoption expenses
. Under the new law, the adoption credit is permanently allowed against the alternative minimum tax, and the beginning of the income phase-out range is doubled to $150,000 of modified adjusted gross income.
Other qualified adoption expenses
included: adoption and attorney fees, court costs and travel expenses (including meals and lodging) while away from home.
A $10,000 credit is allowed in the year of adoption for special needs children even if the taxpayer has no qualified adoption expenses
. The bill would also make the credit available to more taxpayers by raising the income eligibility limits.
After the exclusion for employer-paid adoption costs was enacted in 1996, the family adopted another child, finalizing the adoption in 2000, and spent about $8,000 in qualified adoption expenses
. Not only were the tax credit and exclusion available, but the husband's employer had a generous adoption reimbursement program.