Question about tax credit for adoption?

Question

Does anyone know when you can receive this? Is it after you have paid for the adoption, or can you receive this before to offset the total price of the adoption?

Answer 1

I believe it is in Minnesota after the adoption is finalized and at the end of the year when you go to file your taxes!!....good luck

Answer 2

You receive the credit in the tax year your adoption finalized. In California the child has to be in your home for 6 months before the adoption can be finalized, and it sometimes takes longer for all the paperwork to be filed and to get a court date. That court date would determine the year for which you get the tax credit.

Also the credit is limited based on your income. At higher income levels it is phased out.

Answer 3

After the adoption is finalized in court. There are some banks that will give you a loan against the tax credit if you have all your paperwork etc.

Answer 4

Once you have the child's birth certificate in your hands with your names on it, then you receive the credit.

I'm quite certain.

Answer 5

I have taken the credit twice, and you're not eligible until the adoption has already been completed.  This is true even if you spent the money in a previous year.    If you adopt a child and incur all the adoption expenses in 2007, and the adoption becomes legal in 2008, you cannot take the credit until you file your 2008 return in the spring of 2009.

Answer 6

You recieve the tax credit after the adoption has been finalized. Also, if you owe less that year in taxes then the amount of the tax credit, it will roll over to the next year or two.

Answer 7

You can use the tax credit towards expenses either the same tax year the adoption is finalized or after 1 tax year if you haven't yet finalized or if the qualified adoption fell through (domestic only).

For example we incurred expenses in 2005 and 2006 but didn't finalize until 2007. On our 2006 tax return we could only use the expenses from 2005 and will have to wait until next year to use the 2006 expenses.

The child must be a US citizen, so International adoptions must be finalized before you can use the tax credit.

If you are waiting for the birth cert and SS# you can get a temp tax ID number.

ETA due to response below mine:

Yes, you can take the credit even on failed domestic adoptions, so finalization is not required unless it is a foreign born child. It says so right on the IRS website.

"Although the credit generally is allowed for the year following the year in which the expenses are paid, a taxpayer who paid qualifying expenses in the current year for an adoption which became final in the current year, may be eligible to claim the credit on the current year return."

"The adoption credit or exclusion cannot be taken for a child who is not a United States citizen or resident unless the adoption becomes final."

"the amount of your adoption credit or exclusion is limited to the dollar limit for that year for *each effort* to adopt an eligible child."