Photo: Flickr / nik_donna
Adoptive parents will be getting an even bigger tax credit this year.Parents will be able to receive as much as $13,360 per child, a $190 increase from last year. The adoption tax credit was extended in 2010 through 2012 as part of President Obama’s Affordable Care Act.
The refund is the biggest tax credit offered by the Internal Revenue Service.
Parents with a modified adjusted gross income of more than $185,210 for 2011 qualify, but will receive less than the $13,360 available to families with incomes lower than $185,210.
Those who made more than $225,210 do not qualify.
To file, use Form 8839. Qualified adoption expenses includes:
- Adoption fees
- Attorney fees
- Court costs
- Travel Expenses (including meals and lodging)
- Re-adoption expenses related to foreign adoptions
While the refund can be great (one family received a $54,000 refund), adoptive parents should know they may experience longer wait-times than usual. Because the refunds are so high, the IRS will take extra time validating the claims, an IRS spokesperson told CNN’s Blake Ellis.
In 2011, taxpayers filed about 100,000 returns to claim $1.2 billion in adoption tax credits, according to the Government Accountability Office‘s October 2011 report. Last year, the IRS sent 68 per cent of claims to audit, mostly because of missing papers or documentation that could not be validated. However, no fraudulent adoption tax credit claims were filed, according to the GAO.