The 2006 Federal Adoption Tax Credit is $10,960

      The 2007 Federal Adoption Tax Credit is $11,390

      There are important tax benefits available for child adoption:

      Topic 607 - Adoption Credit

      The federal government now offers an adoption tax credit of $10,000 [adjusted for inflation] to all adoptive families. You may be able to receive this tax credit for qualifying expenses paid to adopt an eligible child (including a child with special needs). This tax credit is more valuable than a tax deduction because allowable expenses are subtracted dollar for dollar against your tax liability. The adoption credit is a sum subtracted from your tax liability … qualifying expenses include reasonable and necessary adoption fees, court cost, attorney fees, traveling expenses (including amounts spent for meals and all lodging expenses ) and other expenses directly related to and for which the principal purpose is the legal adoption of an eligible child.

      To learn more about the tax benefits available and the requirements for taking the Adoption Tax Credit, please see IRS Publication 968, Tax Benefits for Adoption.

      Please download IRS Form # 8839 - Qualified Adoption Expenses.

      Our child adoption agency is not qualified to advise you on income tax matters, and all questions that you have should be directed to your accountant or other tax professional.

      Please download:

      IRS Form # 8839 - Qualified Adoption Expenses. You need to attach Form 8839 to Form 1040 (PDF) or Form 1040A (PDF) and report the credit on line 52 of Form 1040 or line 34 of Form 1040A.

      Form SS-5 - to apply for a Social Security Number ( SSN ) for your child.

      Form W-7 - to apply for an Individual Taxpayer ID Number ( ITIN ) if your child does not qualify for an Social Security Number ( SSN ).

      Form W-7A - to apply for an Adoption Taxpayer ID Number ( ATIN ) if you are adopting a child/ren which is/are US citizen or resident, and cannot get an SSN until the adoption is final.

      

State Tax Credit/Adoption Subsidies

      Many states offer a tax credit or subsidy in addition to the federal tax credit. Ask a tax professional about possible tax credits and/or tax deductions available from the state in which you are residing. You can also check with your state tax office.

       Adoptive parents may receive the same dependency exemption on their income taxes for their adopted child or children placed with them for adoption but not yet finalized, as they would for their biological children. The exemption reduces their taxable income. The amount of the dependent exemption is adjusted annually to reflect the cost of living. The main point to remember is that families must provide more than half of their children's support to list them as exemptions. Some adopted children come with subsidies, which may provide more than half of their support. For more detailed information regarding dependency exemption, please contact your local tax professional.

      Your employer may provide adoption related benefits. If your employer maintains an adoption related benefit program, reimbursement of all, some, or none of the fees you will pay may be available to you under that program. We are recommending that you check with your employer before beginning the adoption process to familiarize yourself with any benefits that may be available and the requirements that your employer may have for payment of those benefits.

 

Receipts of Child adoption agency Adoption Plus Inc

      Our schedule of ESTIMATE OF TOTAL EXPENSES AND PAYMENT SCHEDULE provides a detailed listing of all fees paid to child adoption agency Adoption Plus Inc. This agreement and your cancelled checks will be your proof of adoption expenses. Sometimes a relative or friend will want to help with adoption fees. If this situation applies to you, your fees may be paid directly to child adoption agency Adoption Plus Inc by the persons assisting you. Before making any decisions, we recommend that you contact your accountant for advice.

    

Our, international child adoption agency, suggestions:

      1. Contact your local accountant or tax professional to find out how to take advantage of the adoption
          Tax Credit and the requirements.

      2. Contact your employer to determine if you are eligible for any adoption related benefits and
          what is necessary in order to take advantage of such plan.

      3. Create a separate file for receipts and cancelled checks for adoption expenses; file your Agreement
          for Services and your receipts for everything related to the adoption in that file.

      

RELATED LINKS

      Tax Topics - Topic 607 Adoption Credit

      Internal Revenue Services (IRS)