Congress Makes Adoption Tax Credit Permanent
1/7/2013
The Adoption Tax Credit that was set to expire at the end of 2012 is now a permanent credit. The tax credit allows adoptive parents of children in foster care to deduct adoption expenses from their federal taxes. The credit applies to necessary expenses directly related to the legal adoption of an eligible child.
“As the 112th Congress came to a close, we secured several victories to help improve the lives of children living in the U.S. and around the world,” said U.S. Senator Mary Landrieu of Louisiana in an email sent on January 4 to adoption advocates. “The adoption tax credit, which I have long supported, was made permanent as part of the deal to avoid the fiscal cliff. Every child deserves a protective, loving family, and I hope that a permanent Adoption Tax Credit will enable many more families to open their hearts and homes to a child in need.”
What the Adoption Tax Credit Means for You
An adoptive family can apply this credit toward their federal tax liability, meaning it can offset what they owe in federal taxes for the year but cannot increase the amount of a refund. The maximum allowable credit is $12,970and includes adoption expenses such as necessary adoption fees, court costs, attorney fees, traveling expenses (including meals and lodging while away from home), and other expenses directly related to the legal adoption of an eligible child. All children in foster care under the responsibility of a Title IV-E agency, including all children photolisted on AdoptUSKids, are eligible for this tax credit.
The Internal Revenue Service (IRS) has more information and required forms for claiming the adoption tax credit.
You can also find more information about the Adoption Tax Credit on the following websites:
