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Originally Posted By chieffan9

Hemlata,
The $10,000 federal tax credit DOES apply to international adoptions. However, this thread was specifically talking about the "Special Needs" tax credit. I believe that virtually all foreign adoptions do NOT qualify as a special needs adoption. The difference in the two credits is that for a regular or non-special needs adoption (which probably includes your foreign adoption), you only get the credit if you can prove and document that you had qualifying expenses, such as all of your adoption agency fees, travel expenses, INS fees, etc. For a special needs adoption, you get the entire amount of the credit, whether you had qualifying expenses or not. In most cases, a domestic special needs adoption will cost much less than $10,000 to complete. However, like it has been stated in earlier messages, the government will go ahead and give these adoptees the full $10,000, mainly to help these families offset other expenses that will occur with these special needs adoptions, such as making their houses handicapped accessible, getting a larger car or a van, etc. Even though these are not really "adoption" expenses, they are still expenses that will now occur because of the adoption and the government has made this credit for them available to help. I am also adopting internationally, and, I will assure you that in 99.9% of all foreign adoptions, your expenses will be in excess of $10,000 anyway, so you will almost certainly get the full $10,000 credit.
Chris