Adoption
Tax Credits
(Please
note that this information should not be considered legal advice
or advice from a Certified Professional Accountant.)
The
Hope for Children Act (Public Law 107-16) was passed on May
26, 2001 by both Houses of Congress as part of the Economic
Growth and Tax Relief Reconciliation Act of 2001. On June
7, 2001 President Bush signed the legislation which went
into effect on January 1, 2002.
This Adoption Tax credit
increases the previous $5,000 adoption tax credit for “qualifying adoption expenses” to
$10,000. It also increases the employer adoption assistance
exclusion to $10,000. The
Adoption Tax Credit allows families to take up to $10,000
of qualified expenses as a dollar for dollar tax credit,
not a deduction.
These expenses may be taken in the year
the adoption is finalized and are available for both domestic
and international adoptions.
Download a pdf of The Hope for
Children Act.
IRS
Website on Adoption Credit — Basically "the horses
mouth." Discusses
the law and provides links to the appropriate publications
and forms for parents and tax professionals. Also provides
links for employers to obtain information on setting up an
adoption assistance program and information on how to report
this benefit.
State Subsidy for Adoption
If
you live in one of the following states you might be
able to qualify for $2,000.00 in financial assistance for your
adoption. The list of the state is as follows; Alabama,
Alaska, Hawaii, Idaho, Iowa, Kansas, Kentucky, Maryland,
Mississippi, Missouri, Nebraska, Ohio, Oklahoma, Utah, Vermont.
Go to this site for more details:
http://www.nacac.org/subsidyfactsheets/internationaladoption.html
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