The Federal Tax Credits Blog

Archive for the ‘Adoption’ Category

Question: Should the adoption tax credit be used for foster children only?

In 1996, as the presidential election approached, President Clinton signed a bill that gave money to people who adopted infants and foster children. This was controversial and considered highly political; most of the money went to subsidizing the already profitable adoption industry. Very little went to helping the children who needed it, i.e. those in foster care.

Seeing how the system has developed, should we change the law and direct the money to those adopting from foster care?

Answer: i think the money put aside for this credit needs to go toward reforming the system all together. yes it costs large amounts to adopt through and agency and privately. but if you look before 1996 the charges incured by adoptive parents through private and agencies were about 10k less than they were post 1996. so honestly the credit is helping no one but the agencies. it’s not helping kids in the foster care system and it’s not helping curb the expenses that adoptive couples spend during an adoption. basically you hand the agency 10k in a lump sum, and the governement hands you 10k back, but over time. none of it makes any sense. i would rather see agencies be regulated on fees and expenses and lower those fees charged by 10k, and the gov. spend 10k per child adopted on adoption reform and reforming the foster care system. since you usually don’t get the credit for adopting a child through the foster care system, because you don’t spend 10k to adopt them. the only thing this credit is being used for is a profit to the agencies, and it’s hurting the children and the system that needs it the most.

Financial heavyweights square off on income tax measure

Two long-standing pillars of Puget Sound-area civic life faced off Thursday night over a ballot initiative that would add an income tax on Washington state’s richest people in exchange for cuts to property and business taxes and increased education and health care spending.

The Adoption Tax Credit and the Affordable Care Act (10/05/2010 Webchat)

Where Darrell Moore stands on 9 key issues

Darrell Moore is running for Congress as a Republican Party candidate in Missouri’s 7th Congressional district. Moore answered questions about his positions on 9 public policy issues.

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.

OmniVision Reports Financial Results for Fourth Quarter and Fiscal 2010

SANTA CLARA, Calif., May 27 /PRNewswire-FirstCall/ — OmniVision Technologies, Inc.

Senate Session 2010-04-19 (15:56:28-16:47:53)

Statement of Michael F. Mundaca Assistant Secretary (Tax Policy) Department of the Treasury Before Committee on Ways …

Good morning Chairman Levin, Ranking Member Camp, and members of the Committee. Thank you for inviting me to testify before your Committee today. I appreciate the opportunity to discuss the energy proposals in the President’s FY 2011 Budget.

House Session 2010-04-15 (10:00:54-11:07:11)

Question: Adoption Tax Credit and distribution from 401k?

O.k. my husband and I adopted/finalzed in 2008. In April we took $15K from 401k thinking that we would adopt and finalize the same year. The penalities and taxes we thought the $11650 from the Adoption Tax Credit would be used to offset that.

This is what I have been told.

Is this correct?

Will we end up owing?

Answer: Since the tax on the 401k should be about 5,000 the adoption credit of 11,650 should offset it very well. You will not owe. But the adoption credit is not refundable. Actual refund depends upon everything else. See calculator below.

http://www.hrblock.com/taxes/tax_calculators/index.html?calcIndx=1#top

Why more Americans pay no income tax

If “taxes are the price we pay for civilized society,” to quote Justice Oliver Wendell Holmes Jr., then April 15 is the day that bill comes due for every working American.

Davos Annual Meeting 2010 – CNBC The Next Global Crisis