Wednesday, March 24, 2010

How The Health Care Package Is Helping Adoption

One of the benefits of adoption is the Adoption Tax Credit offered by the federal government. The credit was scheduled to expire in 2010, but our agency sent out an announcement today that the credit has been extended to 2011 as a part of the the health care reform package, with some additional benefits:
  • The maximum credit will increase from $12,150 to $13,170
  • The Adoption Tax Credit is now retroactive to January 1, 2009. This represents a potential increase of $1,000 for adoptive families
  • The Adoption Tax Credit was made refundable. If a family has no tax liability, the IRS will refund the amount due
The tax credit should be a HUGE incentive to families considering adoption! Consider that an average international adoption might cost around $20,000....what if you only were only responsible for $7,000 of that? Many larger employers also offer a reimbursement to their employees who adopt, as well. Money doesn't have to be a deterrent to International Adoption!

5 comments:

Eric and Allyson said...

Good news...thanks for bringing this to our attention Gretchen!

JennT said...

First, I'm glad its not expiring since I wasn't aware that it was going to! Second, its now refundable? Does mean if I only owe $1000 in taxes but I paid $10,000 I will now get back $9000 instead of just owing $0? This credit makes my head spin and I'm so glad you understand it better than I do! Thanks for posting the updates!

Gretchen Magruder said...

Jenn, yes, that refundable part is the really exciting thing for us!! Since the beginning of our process we were convinced it wouldn't benefit us since we pay very little in income taxes (now that self-employment tax, that's another story!). But this (I think) means we'll get that refunded to us even if we don't owe income tax!!

Gretchen Magruder said...

Eric and Allyson, glad it was helpful....like I said, I don't totally understand it, but at least now I know to ask the right questions!

Cindy said...
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