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If you qualify for the entire 10,000 dollars of credit, you will be allowed to use the credit to take the amount that you would have normally been required to pay in income tax for that year down to zero. If you still have credit available after the first year, you can take it each additional year until it is used up. The only thing you can not do is make it so that the IRS owes you for taxes that you did not or would not have normally had to have paid. But they will make it so for the year that you do the adoption you do not have to pay in any income tax for the year if you qualify. If you normally get back every penny that you paid in for the year, then you can not use it. That is the only thing that I can tell you.
I am sorry it seems so confusing, it was not confusing to me until I started reading on here and wondering if i had been reading it wrong. But after talking to the IRS, what had been stated at the beginning which is what I thought is true. Refer to the above reply written by chieffan9.
Good luck
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Jessica
www.organicmommy.com
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