[Linny]

All I can tell you is our situation. (The CAPS are not to yell, but only used as emphasis to show where we were 'at'., okay?)

We make a modest income. We went to H and R Block (as we have for several years). We itemize our deductions.

With our deductions (we have a small farm, three kids, max. amount taken from hubby's check, had extra medical expenses this year).......with these, our TAX AMOUNT THAT WE OWED WAS ZERO.

This information was determined BEFORE the worksheet for the adoption credit was done.....so we knew how much we were going to receive back from the Gov't before anyone even worked on the 'adoption part' of it.

We were getting money back, because, after our deductions and the amount my husband had deducted from his paychecks, showed then, that we OVERPAID.

MY MISTAKE.....and MY misunderstanding of the adoption tax credit, THOUGHT.........that IN ADDITION to this overpayment.....we would receive ADDITIONAL MONEY BACK due to the adoption tax credit.
This was wrong thinking on my part. As it was explained to me.......the adoption tax credit is ONLY used as an effort to REDUCE the tax amount that you owe.
So, with this, once our tax amount owed was reduced to zero......it could not be reduced further. So.....this meant that the adoption tax credit would not bring any further money to our refund. However, we can USE THAT ADOPTION COST AMOUNT in an attempt to REDUCE our tax amount owed, next year and for four years after that.

In other words, if next year, we didn't have so many deductions, then that 'adoption cost amount' would be used to REDUCE our tax owed amount. However, if, like this year, we continued to have a ZERO balance in what we owe (because of our itemized deductions), then, once again, the 'adoption tax credit' cannot be applied to us. And so it goes.

I find this confusing.......MAINLY because it is advertised by many agencies, facilitators, and attorneys as being a way that a couple can re-coup their expenses. This may be. However, if you have a lot of deductions, like we often do, then it seems to me, that there is a good chance that we may never see a 're-coup' of this money at all. Hence, we had to look into other means to come up with that money for our next adoption.

I hope....boy do I hope......that I have not confused you further. My best advice is to do as you have stated and talk with your accountant or H and R Block, or someone else who is a professional before counting on that money. Truly, everyone's case is different.

Most sincerely,

Linny