What is the Adoption Tax Credit?
According to the IRS, “The adoption tax credit offsets qualified adoption expenses, making adoption possible for some families who could not otherwise afford it. Generally, you may qualify for the adoption credit if you adopted a child and paid qualified expenses relating to the adoption. If you attempt to adopt a U.S. child, you may be able to claim the credit even if the adoption does not become final. Congress and the Obama Administration made the Adoption Tax Credit a permanent part of the tax code when they passed the American Taxpayer Relief Act of 2012.
The IRS recently announced that the maximum adoption tax credit for 2016 will be $13,460.00. The adoption tax credit, established in 1997, has helped multiple thousands of families afford to adopt. Remember that a tax credit is different from a tax deduction–it’s better. A credit is an amount that is subtracted from the adopting parents’ tax liability. The adoption tax credit was a refundable credit only in 2010 and 2011, and will not be refundable in 2016.
What Costs Can Be Included in Adoption Tax Credit 2016?
Adopting parents can take a tax credit for “qualified expenses” they spend to adopt a child. “Qualified adoption expenses” are reasonable and necessary adoption fees, court costs and attorney fees, traveling expenses (including meals and lodging), and other expenses directly related to the adoption. The maximum tax credit that parents can take is adjusted each year and for 2016 is $13,460.00.
Read more: http://www.adoptionhelp.org/adoption-tax-credit#ixzz4Pjwr859Y