It's that time of year when the IRS comes calling. If you're a parent with an adopted child or children I just want to remind you of the Federal Adoption Tax Credit for 2014.
If you finalized your adoption in 2014, the credit allowed for an adopted child with special needs
is $13,190; the maximum credit allowed for other adoptions is the amount
of qualified adoption expenses up to $13,190. Phaseouts do apply depending on your income so check with your accountant or tax preparer.
This credit is paid one time for each adopted child, and should be claimed when you file your taxes for 2014. (Usually early 2015).
To be eligible for the credit you must have adopted a child other than a stepchild. The child must be under 18 or unable to physically or mentally take care of him or herself. And again, your earnings must be within the income limits.
Now, if you finalize an adoption this year, in 2015-- which you'll file for next year, the credit allowed for an adoption of a
child with special needs goes up a bit to $13,400, and the maximum credit allowed for
other adoptions is the amount of qualified adoption expenses up to
$13,400. Again, phaseouts do apply so it's always best to check with a professional who specializes in income taxes.
For answers to questions you may have go to http://www.adoptionhelp.org/adoption-tax-credit
or http://www.irs.gov/taxtopics/tc607.html
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