Blog

Adoption Tax Credit Changes

Posted March 29, 2010 by Shannon Suda

Categories: International Adoption, Domestic Adoption

The Adoption Tax Credit, which was scheduled to expire in 2010, has been extended through 2011.

 The Adoption Tax Credit will see several positive adjustments, as confirmed by Joint Council on International Adoption Services:

The maximum credit will increased from $12,150 to $13,170,

The Adoption Tax Credit is now retroactive to January 1, 2009. This represents a potential increase of $1,000 for adoptive families.

The Adoption Tax Credit was made refundable. If a family has no tax liability, the IRS will refund the amount due.

Please consult a tax professional for all of your tax questions.

The extension of the Adoption Tax Credit through 2011, was passed as part of the health care reform bill which was signed into law by President Obama on Tuesday, March 23, 2010. The changes have been published in detail by the Journal of Accountancy:


"For 2010, the maximum adoption credit is increased to $13,170 per eligible child (a $1,000 increase). This increase applies to both non-special needs adoptions and special needs adoptions. Also, the adoption credit is made refundable. The new dollar limit and phase-out of the adoption credit are adjusted for inflation in tax years beginning after Dec. 31, 2010. Also, the scheduled sunset of EGTRRA provisions relating to the adoption credit is delayed for one year (i.e., the sunset becomes effective for tax years beginning after Dec. 31, 2011).

For adoption assistance programs, the maximum exclusion is increased to $13,170 per eligible child (a $1,000 increase). The new dollar limit and income limitations of the employer-provided adoption assistance exclusion are adjusted for inflation in tax years beginning after Dec. 31, 2010. The EGTRRA sunset of provisions relating to adoption assistance programs is also delayed for one year (i.e., the sunset becomes effective for tax years beginning after Dec. 31, 2011)."

- Journal Accountancy, March 22, 2010

Thank you to each family that lobbied for the Adoption Tax Credit by making your voice heard at both the state and federal levels! This is great news for adopting families across the US, making adoption possible for many that could not otherwise afford to build their families through international adoption.