Current Adoption Credit Set to End on 12/31/2012
The expanded adoption credit is set to sunset (expire) on December 31, 2012 unless Congress acts to extend it. Otherwise, the adoption credit rules will revert back to pre 2001 regulations. For 2012, the maximum adoption credit available is $12,650 and is not refundable as was the case in 2010 and 2010. It applies to three types of adoptions: foster care, international, and private adoptions.
For 2013, the $6,000 adoption credit will be only available for special needs adoption and the credit will be non-refundable.
What does this mean for families wanting to adopt? Unless Congress acts to extend the credit, the credit in 2013 can only be used for families that have a tax liability for the year. Some news stories suggest that families are racing to finalize adoptions by year-end to take advantage of the adoption credit.
So are you racing to finalize an adoption?
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