Adoption Credit
You may be able to take a tax credit of up to $13,360 for qualified expenses paid to adopt an eligible child for tax year 2011. The Affordable Care Act increased the amount of the credit and made it refundable, which means it can increase the amount of your refund.
Below are important facts about this credit:
- For 2011, the credit is refundable, meaning that you can get it even if you owe no tax.
- For tax year 2011 you must file a paper tax return and Form 8839, Qualified Adoption Expenses, to get the credit and you must attach documents supporting the adoption.
- Documents may include a final adoption decree, placement agreement from an authorized agency, court documents and the state’s determination for special needs children.
- Qualified adoption expenses are reasonable and necessary expenses directly related to the legal adoption of the child. These expenses may include adoption fees, court costs, attorney fees and travel expenses.
- An eligible child must be under 18 years old, or physically or mentally incapable of caring for himself or herself.
- If your modified adjusted gross income (AGI) is more than $185,210 for tax year 2011, your credit is reduced. If your modified AGI is $225,210 or more, you cannot take the credit.
- Taxpayers claiming the credit cannot file their income tax return and Form 8839 electonically. You must file a paper return to the address listed in your tax return instructions.
