NEW YORK, April 2, 2012 — Adoptive families can get a check for more than $13,000 from the IRS this year.
Adoptive parents can claim up to $13,360 for each child they have adopted in the past six years on their 2011 tax returns. That’s a bit more —$190 to be exact— over last year.
Although the U.S. government has offered some form of adoption tax credit since 1997, it wasn’t until President Obama’s Affordable Care Act of 2010 that the credit became fully refundable in the form of a check from the IRS. Previously, the credit was used to offset tax liability and could be extended forward each year.
Last year, $1.2 billion in adoption tax credits were awarded. The IRS is very careful about doing due diligence. Credits are given in direct response to eligible expenses and they are limited to Americans making under $185,210. Families with a combined income of more than $225,210 aren’t eligible for the credit.
If you are looking to apply for the credit this year, be very careful to document every claim of expense, no matter how small.
Keep all your documents proving the amount of money spent on your adoption. For a list of necessary documentation, go to the IRS website where there is a page dedicated to the adoption tax credit.
Be patient: processing takes time. The IRS is likely to verify your documentation, which may delay your credit. Many parents who have applied for the credit have received follow up questions and call from IRS agents.
Also, be aware that you may get audited. Last year, there were many audits conducted on families claiming this credit. In fact, the Government Accountability Office concluded that there were “considerable” delays in processing refunds because of the sheer number of audits they generated.
Don’t let this scare you off. With substantial refunds, these credits are well worth preparing for and waiting for. Plus, this may be the last year that taxpayers can cash in on the credit.
Congress must extend the tax credit this year and if it does not, the credit will disappear. Currently, there is no serious legislation on the table that will extend this important credit.
It’s important that the millions of Americans who have adopted send letters to their representatives or call their offices to urge them to extend this tax refund. Advocacy from families makes a big difference. After all, it was pressure from the adoptive community that got the credit transformed into a refund and the amount increased in 2010.
This article is the copyrighted property of the writer and Communities @ WashingtonTimes.com. Written permission must be obtained before reprint in online or print media. REPRINTING TWTC CONTENT WITHOUT PERMISSION AND/OR PAYMENT IS THEFT AND PUNISHABLE BY LAW.