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Adoption Tax Credit


Adopting parents should know about an important tax credit which helps offset some of the costs of domestic and international adoptions. This tax credit is especially important for parents adopting children with special needs. Obviously the adoption tax credit helps offset the significant costs of adoption and makes adoption more economically viable and feasible for adopting parents. In the adoption tax credit legislative history , Congress specifically noted that the credit “may make the difference between a child in foster care becoming part of an adoptive family or remaining in foster care indefinitely.”

The Adoption Tax Credit covers reasonable and necessary adoption fees, court costs and attorney fees for the legal adoption of an eligible child, travelling expenses for inter-country adoptions, and other expenses that are directly related to and for the principal purpose of the legal adoption of an eligible child.

The tax credit can be applied to offset tax liability of families who are within certain income limitations and adopt from foster care, adopt infants, and adopt internationally. There are certain income requirements to receive the full tax credit. Typically[ ] , families with moderate income can reportedly only claim an average of $1,100.00 credit annually over six years. Some families are ineligible to claim the credit. Obviously in order to take advantage of the credit it is advised to speak with a certified public accountant.

More information about the Adoption Tax Credit can be obtained from the National Council for Adoption and a local certified public accountant.
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