Adoption tax credit

Adoption Tax Credit

Section 23 of the Internal Revenue code offers a credit for “qualified adoption expenses” paid or incurred by individual taxpayers. The credit is nonrefundable, thus, it can only decrease a taxpayers tax liability to zero. However, if the credit amount exceeds a taxpayer’s total tax liability, the amount may be carried forward for up to 5 years.

Qualified adoption expenses

Qualified expenses include: 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. 1

Limitations

Under 23(b)(1) the total credit amount in any one year may not exceed $10,000, however that amount is adjusted for inflation. The credit limitation does not apply to the adoption of special needs children. In which case the full $10,000 credit is available in the year the adoption becomes final. The taxpayer is permitted to claim the full $10,000 even if he or she spent less than $10,000 on qualified adoption expenses. 2If a taxpayer’s adjusted gross income exceeds $150,000 (adjusted for inflation) the adoption credit is phased out when AGI is $190,000 or more. 2

1 IRS Topic 607 - Adoption Credit. http://www.irs.gov/taxtopics/tc607.html. 2 Samuel A. Donaldson, Federal Income Taxation of Individuals: Cases, Problems and Materials, 2nd Edition (St. Paul: Thomson/West, 2007), 636.


Wikimedia Foundation. 2010.

Look at other dictionaries:

  • Adoption disclosure — refers to the official release of information relating to the legal adoption of a child. Throughout much of the 20th century, many Western countries had legislation intended to prevent adoptees and adoptive families from knowing the identities of …   Wikipedia

  • Adoption — For other uses, see Adoption (disambiguation). Sister Irene of New York Foundling Hospital with children. Sister Irene is among the pioneers of modern adoption, establishing a system to board out children rather than institutionalize them.… …   Wikipedia

  • Adoption Credit — A federal tax credit that may be claimed by federal taxpayers who incur qualifying expenses, such as adoption fees, court costs, attorney fees and travel expenses, to adopt an eligible child. To claim the credit, the taxpayer must submit adoption …   Investment dictionary

  • Cultural variations in adoption — Adoption is an arrangement by which a child whose biological parents are unable to care for it is adopted and given the same legal and social status as though he/she were the biological child of the adoptive parents. For example, under a system… …   Wikipedia

  • Closed adoption — (also called confidential adoption and sometimes secret adoption) is the process by where an infant is adopted by another family, and the record of the biological parent(s) is kept sealed. (Often, the biological father is not recorded even on the …   Wikipedia

  • Disruption (adoption) — Disruption is the term most commonly used for ending an adoption. While technically an adoption is disrupted only when it is abandoned by the adopting parent or parents before it is legally completed (an adoption that is reversed after that point …   Wikipedia

  • Christian law of adoption in India — Christians in India can adopt children by resort to section 41 of the Juvenile Justice (Care and Protection of Children) Act 2006 read with the Guidelines and Rules issued by various State Governments. Apart from that there are customary laws… …   Wikipedia

  • Carbon tax — Part of a series on Green economics Concepts …   Wikipedia

  • Full Faith and Credit Clause — Article IV, Section 1 of the United States Constitution, commonly known as the Full Faith and Credit Clause, addresses the duties that states within the United States have to respect the public acts, records, and judicial rulings of other states …   Wikipedia

  • Flat tax — A flat tax (short for flat rate tax) is a tax system with a constant tax rate. [James, Simon (1998) A Dictionary of Taxation , Edgar Elgar Publishing Limited: Northampton, MA] Usually the term flat tax would refer to household income (and… …   Wikipedia


Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.