Adoption Tax Credit

Adoption Tax Credit

The legal and other expenses of adopting a child can be significant. The law permits adoptive parents to claim a credit against their federal tax for up to $11,390.00 for tax year 2007. The adoption of a ―Special Needs‖ child does not require the taxpayer to have qualifying expenses.

The IRS defines a special needs child as:
 A citizen of the U.S.
 The state determines that the child cannot or should not be returned to his or her parents
 Probably will not be adopted unless adoption assistance is provided to the adoptive parents
 Can also include ethnic background, age, member of minority or sibling group, or mental/physical handicap

If the state determines your child to be special needs, keep that documentation. Qualifying expenses are defined as reasonable and necessary expenses directly related to a legal adoption.

Examples include:
 adoption fees
 court costs/attorney fees
 medical expenses
 travel expenses
 other expenses related to the adoption of an eligible child

Excluded or non-qualifying expenses include:
 adoption of a spouse’s child
 expenses paid or reimbursed by federal, state or local programs
 expenses allowed as a credit or deduction under another income tax rule
 expenses that violate a federal or state law

An eligible child must be
 under age 18, or
 mentally or physically disabled

Tip: The Adoption Tax Credit may be carried forward and used on subsequent tax returns up to 5 years.

For more information, see IRS Form 8839, Qualified Adoption Expenses.

New Mexico supports Adoptive Families!

Within the next several months, monthly support groups, quarterly educational workshops and online support will be available to New Mexico's adoptive families! Support groups will be offered for parents, adopted children and their siblings. Groups will also be provided for Spanish speakers and members of the LGBTQ community. Family Contacts will be identified in each part of the state to provide families with local support and resources. For more information, please check back on this blog in the near future... Good things are yet to come!