7 Things You Didn’t Know about the Adoption Tax Credit

Adoption is a wonderful way to grow a family; for some, it is the only way. Many times the staggering financial cost discourages people from pursuing adoption. Between the general adoption fees including legal fees, court costs, and agency fees, the cost can seem to get out of control quickly. Add onto that the added responsibility of providing for a child and the sheer cost can seem downright overwhelming. However, the United State’s government has several programs in place to help ease that financial burden. One of the most well-known programs utilized by adoptive families is the adoption tax credit. Here are some things you might not know about this program.

  1. The credit can be used towards all qualifying adoption fees.
  2. The maximum credit as of 2017 is $13,570.
  3. Any adoption that is considered ‘special needs’ automatically qualifies for the maximum credit regardless of the out-of-pocket cost. This is done in an attempt to find families for children who would otherwise be hard to place even in situations where most of the adoption fees are waived.
  4. The adoption credit cannot be used for stepchild adoptions.
  5. Adoptive families who earn $243,540 per year or more are not eligible for the credit.
  6. About half of the adoption credits claimed are used in the domestic adoption of children without special needs.
  7. Roughly 18% is claimed by those adopting children with special needs.

The adoption tax credit has helped many to grow their families by making adoption more affordable. Prospective adoptive families should take this credit into consideration when making their decision about adoption. This program encourages adopting through local foster care agencies and adopting children with special needs. It is a great program that will hopefully be around for years to come to ease the financial strain of those who are hoping to grow their families through adoption.