ADOPTION TAX CREDITS
Adoptive Parents may claim a $10,000 tax credit
for qualifying adoption expenses.
The Hope for Children Act, approved June 7, 2001,
amends current Internal Revenue Code regarding allowable adoption
credit and income limitations.
Effective January 1, 2002, the adoption tax credit
for all adoptions will double from $5,000 to $10,000. Additionally,
the revision also increases the earning limit which one can claim
the full credit from $75,000 to $150,000.
Overview of adoption tax law amendment:
-
Increases the Adoption Tax Credit to $10,000
for all adoptions.
-
Allows a $10,000 tax credit for the adoption
of special needs children (beginning 2003).
-
Allows the adoption tax credit to be taken
against the alternative minimum tax.
-
Increases the income amount phase-out range
from $75,000 to $150,000-$190,000.
-
Makes the above features a permanent part of
the tax code.
For information about when the credit can be
taken, special needs adoptions and more, please consult your
adoption attorney or visit the IRS online.
IRS
Publication 968
Hope
for Children Act
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