Adoption Tax Credit Expanded and Improved!


The Internal Revenue Service recently published an article on the expanded adoption credit included in the Affordable Care Act which raises the maximum adoption credit to $13,170 per child, up from $12,150 in 2009. An added benefit to the credit is making the credit refundable, meaning eligible taxpayers can receive it even if they do not owe any taxes for that year. The credit is based on the expenses related to a legal adoption, including adoption fees, court costs, attorney’s fees and travel expenses. Income limits and other special rules apply.

Taxpayers that are eligible must complete Form 8839, Qualified Adoption Expenses, and must include one or more adoption-related documents with their 2010 tax returns. The documentation requirements, created to make sure that taxpayers properly claim the credit, means that taxpayers claiming the credit will have to file paper tax returns. Typically, it takes six to eight weeks to get a refund claimed on a complete and accurate paper return where all required documents are attached. The IRS encourages taxpayers to use direct deposit to speed their refund.

Taxpayers claiming the credit will still be able to use IRS Free File to prepare their returns, but the returns must be printed out and sent to the IRS, along with all required documentation. A copy of the draft version is available here.

Lydia Tarr works as the International Program Director for MLJ Adoptions’ programs in Bulgaria and Ukraine. She is the adoptive mother of four children from Ukraine and was recognized as a 2013 Angel in Adoption by the Congressional Coalition on Adoption Institute’s (CCAI) Angels in Adoption Program.