Nobody Understands the Adoption Tax Credit

The number one question about adoption is probably, “Where do I start?”

The number two question about adoption is probably, “What exactly is the Adoption Tax Credit?”

Interestingly enough, I can totally help with #1. All I can do for #2 is point to the few people who actually understand the Adoption Tax Credit.

Creating a Family has the best, most current information:

The North American Council on Adoptable Children has some very useful information, and is hosting a webinar on the Adoption Tax Credit on March 22.

The IRS has an Adoption Benefits FAQ. It’s a bit dense, but, you know, it’s the IRS, and ultimately, what they say, goes.

The future of the Adoption Tax Credit is up in the air. The National Council for Adoption provides an advocacy kit for those interested in ensuring that the Adoption Tax Credit remains robust.

 Briefly, the Adoption Tax Credit has never been a part of the US Tax Code. It’s always a part of some other Act. In 2010, it was part of health care reform. As of this writing, the Adoption Tax Credit is refundable for adoptions finalized in 2011 or previous. Qualified families can receive up to $13,370 as a refund for actual expenses. If the child is special needs, then the family can receive $13,370 even if they did not have that much in expenses. Next year, for adoptions finalized in 2012, the Adoption Tax Credit will not be refundable. It will revert to what the original 1996 credit was: a $6,000 nonrefundable credit for authorized expenses for special needs adoptions only.
If the Adoption Tax Credit isn’t available for all adoptions, adoption would be out of reach for more Americans. Personally, I think that adoption should be tax deductible. (That’s tomorrow’s post.) But, in lieu of that, the Adoption Tax Credit should be permanent and refundable to help even the playing field between those who can deduct medical expenses for pregnancy and infertility treatments, and those who cannot. There is a petition at to Make adoption costs fully refundable in the 2012 & 2013 Tax Years.

Prior to 2010, the Adoption Tax Credit was not refundable. What does that mean? The best explanation of the Adoption Tax Credit prior to 2010 is in a discussion at



2 thoughts on “Nobody Understands the Adoption Tax Credit

  1. Pingback: Adoption Should Be Tax Deductible « The Chittister Family

  2. Pingback: Adoption Costs A Lot. It Shouldn’t. | The Chittister Family

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