For 2012 the maximum adoption credit per eligible child is $12,650, down from $13,360 in 2011. The credit is no longer refundable and must be used as a credit against tax liability. In general, the credit is based on the reasonable and necessary expenses related to a legal adoption, including adoption fees, court costs, attorney's fees, and travel expenses. Special needs adoptions are eligible for the full credit regardless of whether expenses are qualified.
In order to claim the credit however, your modified adjusted gross income (MAGI) must be less than $229,710. This credit is set to expire on December 31, 2012, but can be carried forward over the next five additional years until the credit is used up or the time limit expires. Moving forward, in 2013 domestic adoptions of special needs children are eligible for a tax credit of $6,000.
If you adopted a child this year, or are planning to adopt a domestic adoptions of special needs children in 2013, you may be eligible for this credit. Additionally, if you adopted a child in 2010 or 2011 and didn't claim the refundable credit, you may be able to file an amended return. Be sure to contact us if you need assistance. We are here to help.
Security Tax Services LLC
North Sound South Sound
2802 Wetmore Ave, Suite 212 33530 1st Way S, Suite 102
Everett, WA 98201 Federal Way, WA 98003
425.339.2400 253.237.0751
fax 425.259.1099 fax 253.237.0701
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