Thursday, March 25, 2010

Adoption Tax Credit

Thankfully, I can say that Congress has done one good thing in the past week. Here is an update on the adoption tax credit if you are considering an adoption!

"To encourage and support adoption, the adoption tax credit was expanded by President Bush and Congress in 2001. This increased the value of the credit from $5,000 to $10,000, and indexed it for inflation (meaning the credit would increase each year to keep up with inflation.) For 2010, its value had risen to $12,170. However, the 2001 increase was scheduled to "sunset" at the end of 2010. This would mean that any adoptions finalized after December 31, 2010 would be eligible for—at most—a credit of only $5,000.

The Adoption Tax Credit which would have expire at the end of 2010 has been extended for one year. That means that it will need to be extended again before the end of 2011. For the present, however, this extension comes as very welcome news for families considering adoption or in the adoption process.
Specifically, the provisions contained in the health care bill include:
• The current adoption tax credit has been extended until the
end of 2011;
• The value of the adoption tax credit has been increased from
$12,170 to $13,170.
• The increase is "retroactive, " meaning that any adoption
occurring after January 1, 2010 is eligible for this higher
credit.
• The credit is now refundable. This means that even families
that owe zero taxes can receive the full tax credit in the
form of a tax refund to help with their adoption-related
expenses."

9 comments:

Lori said...

This really is very good news, which is a refreshing change. I just wish it had been implemented for 2009. UGH. We have a large credit sitting there that would be extremely helpful to us right now.

Kathleen said...

I was just emailed this info from Bethany Christian Services. It was nice to see this good news after the news we were given in the beginning of the week:) It will be a big help to those who are adopting right now!!!

Melissa B. said...

Fabulous news! I can't wait to pass this on... so many people "think" about adoption and are paralyzed by the fear of the financial costs. This is great news.

Holly said...

yippee Jesus!!

Holly said...

oh yes, and I linked to your blog in my post today.

Kimberlie said...

Woohoo!!! Paul and I were stressing majorly about getting our adoption done by 12/31 because we wanted to beat that deadline. Now even if all gov't entities take the longest amount of time to process our adoption, we will still receive a credit. Yippee Jesus!!!

Flamingo Mama said...

wow!! this is awesome!! i found your blog from Building the Blocks. Loved your comment about you not really being a kid person! Love it..

Your family is so beautiful.

Janet said...

=0 Does this mean I get the whole amount back in one year even if I only paid in a portion of that?? (In the past this was spread over several years, based on what you paid in) Am I talking about the same thing? PTL if that is so, we are adopting 2 kids this year, which means I would get enough back to fully fund another adoption the next year!! Janet

Karin said...

Yes, you will be able to collect the full credit even if you have not paid in that amount yet in taxes.