Adoption Tax Credit – 2012

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.

4 thoughts on “Adoption Tax Credit – 2012

  1. Dear Mark,
    If we finalize the adoption of a special needs child through the foster care system in 2012, will we be eligible to claim the full credit in 2013, or will the amount of the credit depend on our expenses? TIA for any guidance you can offer.

    • Hi Jennifer,

      If you finalize in 2012, you will be eligible to claim up to the full credit without showing any actual expenses when you file your 2012 return in 2013. The actual amount of the credit to which you will be entitled will depend upon your modified adjusted gross income (MAGI), as outlined in the above post.

      I hope this is helpful.



  2. Hello Mr. McDermott,

    I too am likely to adopt 2 special needs children in 2012. I understand the “non-refundable” credit, however, how many years is the credit good for? My husband and I hardly ever owe taxes, and I want to determine if this credit will benefit our family.

    Thank you in advance for your assisatance,

    • Hi Cheryl,

      I have good news for you – any part of the credit that cannot be used in the first year can be carried forward for 5 years. Since you are adopting 2 children, you will be entitled to 2 full credits.


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