Any accountants or Lawyers who know about the adoption tax credit?

[Tap]

We are debating between a 'permanent guadianship' and 'adoption' for our dfd23mth. One point that we keep stumbling on is paying for daycare, it helps is that if we adopt there is a possible tax credit of around $10,000. We don't have any qualifing expenses because the baby is comeing through the foster system, and they will be paying for almost all of the cost, and what isn't paid by them upfront will be reimbursed to us by the state.

 

The question I have is this: One of the ways to qualify for the tax credit is for the child to be considered 'special needs'; what constitutes 'special needs' and who determines that? The baby is non-IVE eligible (not eligible for a specific federal grant) but she currently receives funds through the foster program. One article I read said all foster children qualify for the credit and another place said to make sure to save 'supporting data' if you take the credit...what would that look like...supporting data. Is it general documentation of her issues or is it and actual form that the caseworker or doctor signs?

 

We are in Washington, but the case will all be handled in Oregon if that means anything to you.

 

Feel free to PM me if you prefer. ANY information or suggestions are welcome.

[Ferdie]

Several years ago, when we did our foster adopt, it was explained to me that any child adopted from the foster system is considered "special needs" by the federal gov't in order to qualify for the $10,000 tax credit. Our supporting data was our adoption paperwork.

 

We didn't have any adoption expenses either, but the $10,000 adoption credit was a true credit off your federal taxes. You can also carry it forward, (I think up to 5 years) if you don't use it all in one year.

 

We adopted 2 foster children in the same year so we had a $20,000 tax credit and didn't pay federal taxses for years. My dh still had the federal taxes withheld at work so we used to get a whooping tax refund every spring. I miss those days!

 

HTH

[SonshineLearner]

As someone who's had to deal with "the other parent" I think their would be less chance of visitation being given at some point...if you adopt. I would love to be able to not have other parents getting in our lives.

I'd want to adopt.

 

Carrie:-)

[KrissiK]

We have adopted three children and do our taxes on Turbotax. According to Turbotax, special needs is also being a minority, and since our kids are hispanic, we get it. It's not $10,000 at one fell swoop. I'm not sure how much of it we get every year, there's always carryover. But, it's not hard to get.