The adoption tax credit has increased to $12,150 for 2009! In layman’s terms this means that any money you spend completing an adoption up to this amount will be considered by the IRS to be paid toward taxes due.
Eligible expenses include adoption fees, legal fees, court costs, and traveling expenses. Expenses for a failed adoption may qualify if followed by a completed adoption. The adoption tax credit is for money paid out-of-pocket and not expenses paid for or reimbursed to you by your employer, any organization, etc. When adopting a child with special needs, you can claim the entire tax credit of $12,150 regardless of money spent. The adoption tax credit does begin to be reduced when your modified adjusted gross income is $182,180 or more. If the tax credit exceeds the amount owed, the remainder can be utilized in the following tax year for up to five years. If you have an questions regarding the details of the adoption tax credit, please contact a professional tax accountant.
The adoption tax credit is only one resource that can help make adoption an affordable option for you and your family. Many grants (or loans) are available specifically to facilitate adoption. Don’t forget that you can claim your child as a dependent on all future tax returns. All clients of MLJ Adoptions, Inc. are provided a Financial Resource Guide filled with resources and ideas on financial assistance and fundraising efforts, as well as an opportunity to ask questions of our Financial/Grant Advisor, Camie Shuiteman. It is our goal to find loving homes for orphans.