[vesw01]

Has anyone rcvd the $10k from the government or will be applying for it? I didn't know if you get that credit the year the adoption becomes official or the year after.

[BuckarooBanzai]

You capture the Federal Adoption credit on your taxes for the year the the adoption finalizes. This is a credit that offsets any owed taxes. Unused amount is carried forward. It took us 4 years to use up the first credit. I expect to take 3 years to use up our second credit.

[rmyoung]

it would take a while to reach that amount

[leenab]

We've adopted twiced and took the credit both times. Any that you don't use rolls over. We adopted 2 children in 2004 and took the credit in 04, 05 and have some left for 06. We should finalize J's adoption soon so we'll have a credit for 07 and maybe 08 if it doesn't get completly used in 07.

Whether you have a credit carry forward or not depends upon your income as well as expenses. For special needs U.S. fostercare system adoptions there's little expense, but special needs children get the full amount. If your income is high and you pay in more to federal taxes then you're going to use up more of your credit and have less to carry forward/if any.

[hubbyswife]

How does the Adoption Tax Credit work?

[vesw01]

So you never get the money like you do with other credits....like the child tax credit or the earned income credit - those you get the excess to keep

So if we don't owe any taxes due to other deductions then we don't get to use it?

[Chancey]

vesw01 - correct, if you don't owe any federal income taxes you don't get the benefit of the credit.

Hubbyswife - here is a great website that lists how you qualify for the credit... you have to adopt a special needs child NACAC | Public Policy

[vesw01]

That is a great website - really informative!! Thank you so very much!

[hubbyswife]

Thanks Chancey....