The Federal Tax Credits Blog

Archive for the ‘Adoption’ Category

Question: Adoption tax credit is refundable this year?

Okay…please don’t slam me or tell me I’m stupid.

I guess I’m in disbelief.

But, I have been told for 2010, that the adoption tax credit is now a refundable credit.

What I have been told is that if anyone has the credit and/or still qualifies for a carry-forward, we will get our carry-forward paid to us.

Anyone know if this is truly correct? Everything I’ve been seeing says “yes”…but the cautious side of me wants to make sure that I haven’t mis-read anything, or if there are any stipulations.

Answer: Hi,
This is from the IRS:

Topic 607 – Adoption Credit

In 2010 and 2011, you may be able to take a refundable tax credit for qualifying expenses paid to adopt an eligible child (including a child with special needs). This means that you could qualify for a tax refund even if you did not have federal income tax withheld. For tax years prior to 2010, the adoption credit is not refundable.

Under new Adoption Credit Rules for the 2010 tax year, you must attach one or more adoption-related documents (identified in the form instructions) with the completed Form 8839 (PDF), Qualified Adoption Expenses, and attach the form to your Form 1040 or Form 1040A return, to claim the adoption credit or income exclusion. The required documents are different if the adoption is foreign, or domestic, final or not final and if the adoption is for a special-needs child.

A tax credit, including the adoption credit, reduces your tax liability. For expenses paid prior to the year the adoption becomes final, the credit generally is allowed for the year following the year of payment. For expenses paid in and after the year the adoption becomes final, the credit is allowed in the year of payment. The adoption credit is not available for any reimbursed expense. In addition to the credit, certain amounts paid by your employer for qualifying adoption expenses may be excludable from your gross income.

A taxpayer who paid qualifying expenses in the current year for an adoption which became final in the current year, may be eligible to claim the credit for the expenses on the current year return, in addition to credit for expenses paid in a prior year.

For both the credit or the exclusion, qualifying expenses include reasonable and necessary 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. An eligible child must be under 18 years old, or be physically or mentally incapable of caring for himself or herself. The adoption credit or exclusion cannot be taken for a child who is not a United States citizen or resident unless the adoption becomes final. In the case of an adoption of a special-needs child, you may be eligible for a certain amount of credit or exclusion regardless of actual expenses paid or incurred. A child has special-needs if (1) the child otherwise meets the definition of eligible child, (2) the child is a United States citizen or resident, (3) a state determines that the child cannot or should not be returned to his or her parent’s home, and (4) a state determines that the child probably will not be adopted unless assistance is provided. The credit and exclusion for qualifying adoption expenses are each subject to a dollar limit and an income limit.

Please read more:

http://www.irs.gov/taxtopics/tc607.html

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Adoptive parents still waiting for tax refunds have created a Facebook page to share their experiences.

Some families due to get big return

FP Newspapers Inc. Reports First Quarter 2011 Results

WINNIPEG, MANITOBA– – FP Newspapers Inc. formerly FP Newspapers Income Fund announces financial results for the quarter ended March 31, 2011. FPI is the successor to the business of the Fund.

TYT Episode For December 21, 2009

Question: Tax question in regards to foster care / adoption?

I keep getting mixed answers so I’m confused. We have custody of a child that is in foster care. We will have had custody for over a year by the end of ‘08. We are in the process of adoption. My question is- can we claim the child for the ‘08 tax period? The adoption is expected to go through in early ‘09. Are there any tax credits for adoption? Thank you in advance.

Answer: A foster child placed by the State or a State authorized placement agency is treated as your natural child for tax purposes. Since the child will have lived in your home for more than 6 months at the end of 2008, you can claim the child under the Qualifying Child rule as long as the CHILD did not provide more than half of their OWN support and meets the age requirements, i.e. under age 19 or under 24 if a full time student.

The stipend you receive from the state is not taxable income to you and is not treated as self-support provided by the child. It has no affect on your tax return at all.

Contrary to what another poster seems to think, the child is NOT the “dependent” of the State. Legal custody has never been a requirement under the Tax Code.

Group files petition on affordable housing plan

A Clovis citizens group is seeking to put another ordinance to Clovis voters. The High Plains Patriots on Tuesday filed a petition regarding the commission’s passage of an affordable housing plan last week. City Clerk LeighAnn Melancon said the…

Gay Adoption Story Part 3 “Meeting Our Kids”

Question: Why do so many always complain about people on welfare when the amount of money that goes to them?

is trivial at best?

According to The Budget for Fiscal Year 2008, Historical Tables, total outlays for Means Tested Entitlements in 2006 were $354.3 billion. This was 2.7% of GDP and

Includes Medicaid, food stamps, family support assistance (AFDC), supplemental security income

(SSI), child nutrition programs, refundable portions of earned income tax credits (EITC and HITC) and child tax credit, welfare contingency fund, child care entitlement to States, temporary assistance to needy families, foster care and adoption assistance, State children’s health insurance and veterans pensions.

http://polecolaw.newsvine.com/_news/2008/01/08/1212663-how-much-does-welfare-cost

Answer: Because they are brainwashed into thinking these programs are far more than 2.7% of taxes paid and they are also not compassionate human beings.

Cinch Energy Corp. Releases Q1 2011 Results

CALGARY, ALBERTA–(Marketwire – May 10, 2011) -

Dr. Steven Pitts: Too Many Jobs Don’t Pay Livable Wages

Fortis Inc. Earns $117 Million in First Quarter

ST. JOHN’S, NEWFOUNDLAND AND LABRADOR– – Fortis Inc. achieved first quarter net earnings attributable to common equity shareholders of $117 million, or $0.67 per common share, compared to $100 million, or $0.58 per common share, for the first quarter of 2010.

Senate Session 2011-02-14 (15:03:27-16:08:18)