3 Responses to “On this adoption tax credit. Can you claim the credit if you adopted through a foster care agency?”

1. 1Mrs. WC

   From the IRS website…

   Topic 607 - Adoption Credit

   You may be able to take a tax credit for qualifying expenses paid to adopt an eligible child (including a child with special needs). The adoption credit is an amount subtracted from your tax liability. Although the credit generally is allowed for the year following the year in which the expenses are paid, a taxpayer who paid qualifying expenses in the current year for an adoption which became final in the current year, may be eligible to claim the credit on the current year return. The adoption credit is not available for any reimbursed expense. In addition to the credit, certain amounts reimbursed by your employer for qualifying adoption expenses may be excludable from your gross income.

   For both the credit or the exclusion, qualifying expenses include reasonable and necessary adoption fees, court costs, attorney fees, traveling expenses (including amounts spent for meals and lodging while away from home), and other expenses directly related to and for which the principal purpose is the legal adoption of an eligible child. An eligible child must be under 18 years old, or be physically or mentally incapable of caring for himself or herself. The adoption credit or exclusion cannot be taken for a child who is not a United States citizen or resident unless the adoption becomes final. An eligible child is also a child with special needs if he or she is a United States citizen or resident and a state determines that the child cannot or should not be returned to his or her parent’s home and probably will not be adopted unless assistance is provided. Under certain circumstances, the amount of your qualified adoption expenses may be increased if you adopted an eligible child with special needs.

   The credit and exclusion for qualifying adoption expenses are each subject to a dollar limit and an income limit.

   Under the dollar limit the amount of your adoption credit or exclusion is limited to the dollar limit for that year for each effort to adopt an eligible child. If you can take both a credit and an exclusion, this dollar amount applies separately to each. For example, if we assume the dollar limit for the year is $10,000 and you paid $9,000 in qualifying adoption expenses for a final adoption, while your employer paid $4,000 of additional qualifying adoption expenses, you may be able to claim a credit of up to $9,000 and also exclude up to $4,000.

   The dollar limit for a particular year must be reduced by the amount of qualifying expenses taken into account in previous years for the same adoption effort.

   The income limit on the adoption credit or exclusion is based on your modified adjusted gross income (modified AGI). If your modified AGI is below the beginning phase out amount for the year, the income limit will not affect your credit or exclusion. If your modified AGI is more than the beginning phase out amount for the year, your credit or exclusion will be reduced. If your modified AGI is above the maximum phase out amount for the year, your credit or exclusion will be eliminated.

   Generally, if you are married, you must file a joint return to take the adoption credit or exclusion. If your filing status is married filing separately, you can take the credit or exclusion only if you meet special requirements.

   To take the credit or exclusion, complete Form 8839 (PDF), Qualified Adoption Expenses, and attach the form to your Form 1040 (PDF) or Form 1040A (PDF).

   Comment on Jul 6th, 2009 at 10:59 am  
2. 2Tres7

   Your Renewable Energy Solutions

   I feel sure you can. You will need cancel led checks, travel expenses, legal fees, etc. You can see the 2007 law on line and that should tell you. The deduction is certainly worth trying to get, it is a big one.

   Comment on Jul 7th, 2009 at 10:26 am  
3. 3v b

   Congratulations on your adoption.

   The credit is designed to help you with your expenses. Even “minimal expenses” are worth asking for.

   It’s form 8839. For *your* records, you would keep the documents that support the numbers you put on the form. You don’t send them to the IRS, but have them ready if they ask to see them.

   You should be able to file electronically.

   Qualified adoption expenses include:

   Adoption fees,

   Attorney fees,

   Court costs,

   Travel expenses (including meals and lodging) while away from home, and

   Re-adoption expenses relating to the adoption of a foreign child.

   Qualified adoption expenses do not include expenses:

   For which you received funds under any state, local, or federal program,

   That violate state or federal law,

   For carrying out a surrogate parenting arrangement,

   For the adoption of your spouse’s child,

   Paid or reimbursed by your employer or any other person or organization,

   Paid before 1997, or

   Allowed as a credit or deduction under any other provision of federal income tax law.

   Comment on Jul 8th, 2009 at 6:18 pm  

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