On December 14th, I spoke with Dawn Davenport on her Creating a Family radio show. Our conversation focused on the Adoption Tax Credit. Take a listen – we covered some great information. Additionally, for another resource, take a look at Creating a Family’s FAQ page on the Adoption Tax Credit.
The adoption tax credit is adjusted each year based upon the cost of living allowance. The adjusted numbers have been published by the IRS in Revenue Procedure 2011-52. The maximum credit for 2012 will be $12,650. The full credit will be available to taxpayers with modified adjusted gross income of $189,710 or less and the amount of the available credit phases out to zero as modified adjusted gross income approaches $229,710. It will not be a refundable tax credit in 2012.
Recently, I prepared a paper for the annual meeting of the American Academy of Adoption Attorneys, a national association of 330 attorneys who practice and distinguish themselves in the field of adoption law. The meeting took place in Savannah, Georgia from May 4 to May 5.
My paper addressed changes to the adoption tax credit and the ramifications going forward. For more information, read the full paper here: Adoption Tax Credit is Alive and Well – Mark McDermott
Periodically, I speak to different groups interested in adoption issues. As I have done before, on May 2, I gave the keynote address before the International Visitor Leadership Program, a program of the U.S. State Department. My keynote address described the legal and social context for international adoptions in the U.S.
If you have questions about this topic, please feel free to contact me, as I am glad to offer assistance.
Linked here is a resource that I helped compile about the ins and outs of post-adoption paperwork for international adoptions. This resource includes how to obtain a birth certificate, social security number, certificate of citizenship, and all the other documents you need to verify that the adoption is final and that your child is a legal U.S. citizen.
Here is a link to an article I wrote on the most common questions regarding the adoption expense tax credit, including its provisions for international and domestic adoption. It was published in Adoptive Families Magazine.
More Information on the Tax Credit:
A Federal tax credit for adoption expenses has been available since 1997. Unless extended by Congress, the credit will cease to exist on 12/31/10 for all adoptions except those involving children with special needs. The adoption community has always anticipated that the credit would be extended, but that expectation has now been tempered by the current economic crisis. Despite that impediment, there are several bills pending in Congress to extend the credit (S. 722, S. 2816 and H.R. 213 the text of which can be viewed at http://thomas.loc.gov). Members of the adoption community should encourage their elected representatives to extend the tax credit.
The amount of the maximum tax credit is increased annually based upon the cost-of-living allowance (COLA). Based upon COLA, the individual income levels at which the credit is phased out are also increased each year. For 2010, the maximum credit is $12,170 per child. Full details about the 2010 COLA adjustments, were announced by the IRS in Revenue Procedure 2009-50 that can be viewed at http://www.irs.gov/irb/2009-45_IRB/ar11.html (the relevant paragraphs are paragraph .03 and paragraph .14)