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Birthmother expenses are not directly addressed by the IRS in their instruction forms. But if you are paying those expenses to your agency or attorney, then they are likely to count in the general bucket of "fees". (Yet another reason to never pay money directly to a family considering placing their child for adoption. Always pay it to your agency/attorney and get a receipt.)
The IRS rule about using the credit against adoption expenses is that you can calim the tax credit in the year the adoption is finalized, OR in the year after the expenses were paid. Whichever comes first.
So if you pay fees in 2009 and have a finalized adoption in 2009, you claim those expenses against the credit on your 2009 taxes.
But if you pay fees in 2009 and the adoption does not finalize in 2009 (for whatever reason), then you claim those expenses against the credit on your 2010 taxes.
And yes, that means if you pay fees in 2009, and finalize in 2010, you can claim both years worth of expenses against the credit on your 2010 taxes.
One thing to be aware of is that the IRS consideres all attempts to adopt a child as being ONE attempt to adopt ONE child. So you only qualify for one credit total. So the $4,000 you paid for your failed match last year can't ever be claimed again later, even if your next match is successful and cost $11,000. You've already used $4,000 of the credit, and only have $7,000 left to use on what will hopefully be the finalized adoption.
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