The Adoption Tax Relief Guarantee Act

If you're hoping to adopt a child domestically or internationally, the Adoption Tax Relief Guarantee Act provides significant financial relief from the high costs of adoption in the U.S. As with most U.S legislation, the Adoption Tax Relief Guarantee Act is complex; in 2013, Congress voted to permanently extend the benefits through the American Taxpayer Relief Act of 2012.

  1. What the Bill Is

    • The Adoption Tax Relief Guarantee Act was introduced in 2011 to prevent the expiration of legislation enacted in 2001 that provided tax credits to adoptive families. That legislation was slated to expire in 2012. Passage of the American Taxpayer Relief Act of 2012 (H.R.8) in January 2013 permanently extended the adoption tax credit legislation to offset adoption expenses for eligible adoptive families. This law allows you to subtract up to $12,970 in adoption expenses in 2013 from your income on your income tax return if you meet the criteria.

    What It Covers

    • You can add up various adoption costs to deduct as a tax credit, including lawyer's fees, court costs, travel expenses, including food and lodging as well as other expenses directly related to the adoption of a child under the age of 18. If you adopt a special-needs child from the U.S., you may be able to claim the full deduction, even if you had few or no related adoption expenses, once the adoption has become final. However, you cannot use this tax credit to offset costs for adopting your spouse̵7;s child.

    Who Can Use It

    • You can use the adoption tax credit if you adopt a child in the U.S. or internationally, but the time frame for using it differs. For international adoptions, you can file for the credit only in the year when your adoption is finalized. For domestic adoptions, you can file for expenses incurred the year before you finalize the adoption; you can apply for the credit even if the adoption is never finalized, according to the IRS. If your modified adjusted gross income exceeds $234,580, you cannot claim the credit. The credit is prorated starting at a modified adjusted gross income of $194,580 in 2013, according to the IRS.

    How to Claim It

    • When you file your income tax paperwork, fill out Form 8839, which deals with the adoption tax credit. You do not have to send in documentation verifying your expenses, although you should have this information available should the IRS request it. This form, along with your 1040 form, must be printed and mailed to the IRS; you can't file them electronically.

    2. Previous:

    Next:

    • How to Obtain Adoption Records in Connecticut
      There are two types of adoption records in Connecticut: records that do not identify the birth parents, but contain other information about them; and records that give the birth parents or the adopted childs identity. Only certain people have a right
    • Adoption Agencies With Haiti Programs
      Adoptions from Haiti have become much more common in recent years. With timelines of nine to 15 months, the program moves much quicker than other international adoptions. Haitis proximity to the United States allows adopting couples to travel more fr
    • How to Write an Adoption Autobiography
      Creating a family through adoption is a rewarding and momentous journey for the parents and the adopted child. Adoption, however, can be a roller coaster of emotions for those anxiously waiting to be selected by a birth parent. The adoption autobiogr