If you adopted a child in 2011 or plan to in 2012, you may eligible for a Federal tax credit. You qualify for the adoption tax credit if you adopted a child and paid out-of-pocket expenses relating to the adoption.
Qualified adoption expenses are reasonable and necessary adoption fees. They include: court costs, attorney fees, traveling expenses (including amounts spent for meals and lodging while away from home), and other expenses directly related to the legal adoption of an eligible child. Expenses paid in an unsuccessful attempt to adopt an eligible child before finalizing the adoption of another child can qualify for the credit.
The amount of the tax credit you qualify for is directly related to how much money you spent.
The credit can be taken on up to $13,360 of costs. If you adopt a special needs child you are entitled to claim the full amount of the adoption credit even if your out-of-pocket expenses are less than the tax credit amount. The credit is reduced for higher- income taxpayers starting with AGls over $185,210 and ends at $225,210.
Contact me if you are interested in hearing more about tax credit.
Stacey R. Edwards Jones, Managing Partner