Good news for parents who have chosen to adopt – in case you weren’t aware, these days the adoption tax is refundable. The rule change came in earlier in the year and it has meant that taxes for 2010 and for this year will yield a bigger than you hoped for refund. If you missed it in 2010 make sure you take advantage this year – just remember that refundable is a great word to hear when it comes to taxes – the government will end up owing you some money back and you’ll get a refund check.
If you incur any expenses related to your adoption you have a right to a tax credit which will bring down your liability dollar to dollar. Thus in 2010 parents were able to get back as high a figure as $13,000 per child. In addition the adoption credit allows you to bring forward any unclaimed allowances from up to five years before. However, as with all things tax related, there are more forms to fill out – to get an adoption tax credit you’ll need to fill out Form 8839 and any extra and relevant paperwork.
However, the paperwork is well worth it and if you are raising an adopted child then the refund should be first on your list of claims for 2011.
Alex is a freelance journalist and financial blogger. He loves to write about football and jazz but spends most of his days writing about mortgages, credit cards and payday loans.
- Tax Refunds and Bankruptcy (2008taxes.org)
- TurboTax iPad App Allows You Tap Your Way to a Tax Refund (2010taxes.org)
The Adoption Tax Credit Explained by Steve