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One thing you need to bear in mind is that until 2003, you will only receive credit for money you ACTUALLY SPENT in pursuing the adoption. So if you spent $2,000 adopting, you only get a maximum $2,000 credit - NOT $10,000. Beginning in 2003, if you adopt a "special needs" child - that would be virtually any state/foster care adoption of a child who is NOT a white child under 2 years old, you get a credit of $10,160 REGARDLESS of how much money you spent on the adoption. So if you spend $0 to adopt in 2003, you will still get a credit of $10,160, IF you owe taxes of that amount or greater.
Hope I didn't just make the confusion worse, but for those of us doing special needs adoptions, this is awesome. In terms of attorney fees, homestudy expenses, etc., I will spend $0 adopting my daughter in 2003. So getting this big old refund will be a nice chunk of change in her college fund.
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