Adoption Tax Credit

Thanks to all of your help and support, on January 2, 2013, Congress passed a bill to avert the “fiscal cliff,” ensuring the permanency of the adoption tax credit and extending the tax credit as it was in the 2001 Economic Growth and Tax Relief Reconciliation Act.

The credit will remain "flat" for special needs children, meaning families who adopt a child with special needs do not need to document qualified adoption expenses. A significant majority of foster children are considered special needs.

For all other adoptions the tax credit has been declared nonrefundable, only benefitting those adoptive families with a federal income tax liability.

The adoption tax credit applies to all types of adoption and has made adoption a more viable option for many families who may not have the funding to afford adoption otherwise. By preserving this credit and keeping the costs of adoption at a minimum, the incentive for parents to adopt increases, subsequently increasing the opportunity to provide more children with the loving, permanent families they deserve.

We are pleased that the adoption tax credit has been saved, but understand the importance to advocate that it be refundable, which we will do. Congress has expressed interest in long-term solutions and border tax policy reform leaving room to believe that there is a good opportunity for continued support on this subject.

For more information about the Adoption Tax Credit and ongoing advocacy strategies,

Please visit: www.adoptiontaxcredit.org .

Adopting From Fostercare: Benefits You Might Not Have Known About

If you are thinking about foster adoption or are currently an adoptive parent, it is important for you to know some of the benefits that you and your adopted child are eligible to receive.

Did you know:

• That foster adoption costs you little to nothing compared to private adoptions that may cost you between $5,000 - $40,000 (including international and domestic infant adoption) 
• State and federal assistance programs offer financial help to adoptive parents of eligible children to help offset medical fees and any other necessary costs that may arise during the adoption process and throughout your child’s life until he or she turns 18. Types of financial assistance may include: 
• Monthly government subsidies and reimbursements (Federal and State)
• Special loans and grants 
• Paid medical coverage for children (Medicaid card) 
• Visit this site for more information about the Federal IV-E Adoption Assistance. Program guidelines. State assistance programs vary by state. Check your individual state guidelines on this website. 
• Adoption Tax Credits : Families who adopt children from foster care under the responsibility of a Title IV-E agency are eligible for a one-time tax credit of up to $13,000 to help offset court costs, legal and travel expenses, and other miscellaneous fees directly related to a legal foster adoption. 
• Employer Adoption Benefits: A growing number of companies have begun to offer benefits to employees who adopt. These benefits can include financial reimbursement for legal fees, agency fees, and post-adoption counseling. Some employers even offer paid leave time, and help finding resources and referrals if you desire more information or support. 
• Scholarships: Many organizations and foundations have scholarships in place specifically for children adopted from the foster care system. This will ensure a bright future for your child and help secure a higher education for him or her. 
• Probably the greatest benefit of adoption from foster care is providing a child the priceless gift of a loving, safe and permanent home.

Adoption Tax Credit

With just over 2 months to go to file 2011 taxes, we wanted to remind you about the Adoption Tax Credit. Information provided by Voice For Adoption.

The Facts:

• Since 2003, families who adopted a U.S. child with special needs from foster care could claim a federal adoption tax credit even if they had no adoption expenses (as long as they met the fairly generous income requirements). 
• Children who receive adoption assistance/subsidy benefits are considered children with special needs. Even families who receive a deferred subsidy ($0 per month but medical coverage through the subsidy program) are eligible. 
• All adoptive families (except those who adopted a step-child) are eligible for the credit, but those who adopt children other than those with special needs must have—and be able to document, if requested by the IRS—qualified adoption expenses. 
• For 2010 and 2011 the credit was made refundable. If parents who adopted as long ago as 2005 had credit to carry forward into 2010, that amount of the credit also became refundable. In 2010 and 2011, parents can claim the credit even if they don’t have income or any tax liability. 
• The amount of the credit for 2011 is $13,360 per child. 

The Information:
IRS Form 8839 Instructions: http://www.irs.gov/pub/irs-pdf/i8839.pdf
IRS Form 8839: http://www.irs.gov/pub/irs-pdf/f8839.pdf
IRS – adoption tax credit FAQ’s: http://www.irs.gov/individuals/article/0,,id=231663,00.html

Tools & Resources from the North American Council on Adoptable Children (NACAC): http://www.nacac.org/taxcredit/taxcredit.html