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)