There is good news in the new health care bill for adopting parents. H.R. 3590 includes a provision to extend the adoption tax credit until December 2011 (see pages 904-906). The tax credit has also been increased from $12,170 to $13,170 for adoptions occurring after January 2010. The health care bill also allows the tax credit to be refundable.
What this new tax law means for prospective adopting parents. According to Lee Kutz, of Kutz Accounting in Joplin, this new tax law means that adoptive parents may apply up to $13,170 of their adoption expenses toward their taxes owed, thereby decreasing the amount owed overall by this amount. In the event that the couple owes less than the tax credit amount stated, they may receive some or all of the balance as a refund on their Federal taxes. Many groups and individuals have successfully lobbied to help extend this tax credit beyond its original expiration date of December 2010, and are still seeking to make the tax credit permanent.
Since most international and private domestic adoptions cost upward of $10,000, this tax credit makes adoption much more affordable for families from many different income brackets. This, in turn, helps more children find permanent homes.
Author’s note: I wish to thank Brandy and Jason for bringing my attention to this topic, as well as Lee Kutz for his explanations of IRS terminology.
Comments
This is SUCH great news!! Both domestic and international adoptions are actually in the $30,000 range, not $10,000. So the extension of this tax credit is a HUGE blessing to many families.
Ditto - I wanted to point out that they are MUCH more than 10k; applications alone are about 5k, then 25-30k on top of it to complete a domestic adoption. Tax credit is a huge help w/that.
You are both right - I was actually just trying to throw in an average of both private adoptions and those done through the state (which are much less expensive, and in some cases, practially free). I wanted to make sure I clarified, lest you think I'm not very current! :-) Thanks for reading and commenting!
I realize this is late in coming but I just found this article. Between 20k and 40k is a good average as well - Eastern Europe, South/Central America are upwards of 40k each, but China is still about 23K, and countries like Nepal and India are about 30k. I already have one child from China - 2005 and waiting on another next year and I've researched all countries over that time frame. To be honest - to find children loving permanent homes someone should do something about the cost in general...The act is a blessing if it all works out thogh.
Since this applies to adoption through state foster care as well (you get the entire credit) - does that mean the full amount is now refundable? That is a HUGE change!
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