Affording Adoption
The Future of the Adoption Tax Credit
(Editor’s note: This article was edited after publication to revise some unclear statements and to add the link to the advocacy kit.)
We at Adoption Associates are doing our part to extend the tax credit for 2012-13! For many families the cost of adoption is what keeps them from starting the journey to adopt. The tax credit that families enjoyed in 2010 and 2011 has changed for 2012. While the credit in place helps alleviate some of the cost, it is diminished compared to recent years. The Senate Finance Committee is about to vote on S. 82, the Adoption Tax Credit Guarantee Act and we are petitioning for them to vote YES to save the adoption tax credit.
BRIEF SUMMARY:
- The Adoption Tax Credit has been extended through December 31, 2012. Beyond 2012, the tax credit will revert to the previous credit that was in place prior to 2002.
- Adoption Tax Credit Amounts (if no changes are enacted):
2011: $13,360 (indexed for inflation, refundable)
2012: at least $12,170 (indexed for inflation, non-refundable)
2013: $6,000 for a special needs child - The Adoption Tax Credit is refundable only through 2011.
TO HELP:
Take a minute to add your name to this petition to make adoption costs fully refundable in the 2012-2013 tax years.
The National Council for Adoption has created an advocacy kit for families interested in petitioning Congress to extend the tax credit. The kit includes the history of the tax credit, talking points and a script for calling your representative or senator, a sample letter that you could send to your representative or senator, and a sample letter to the editor. Download your advocacy kit today!
For more information on the tax credit, see Form 8839, Qualified Adoption Expenses (PDF), and the worksheets located in the instructions (PDF), both available from www.IRS.gov. This form sheds light on important documents to begin collecting to make filing for your credit much easier.
For detailed advice regarding the credit, contact a tax advisor.
Find out more about changes to the adoption tax credit at www.IRS.gov.
Links to additional resources:
Tax Benefits for Adoption: the Adoption Tax Credit - article in Adoption Advocate, a publication of the National Council for Adoption
Questions and Answers on Adoption Benefits
Adoption Credit, IRS Tax Topic 607 – information on qualifying expenses paid to adopt
