Most of you have already heard the news about the adoption tax credit legislation this week -- and are REJOICING, no doubt -- but for those interested in more details, read below:
From the Christian Alliance for Orphans Blog:
Amidst the intense controversy of the health care bill signed into law by President Obama yesterday, there’s at least one provision every orphan advocate can cheer. The adoption tax credit was preserved for another year...and increased in value!
To encourage and support adoption, the adoption tax credit was expanded by President Bush and Congress in 2001. This increased the value of the credit from $5,000 to $10,000, and indexed it for inflation (meaning the credit would increase each year to keep up with inflation.) For 2010, its value had risen to $12,170. However, the 2001 increase was scheduled to “sunset” at the end of 2010. This would mean that any adoptions finalized after December 31, 2010 would be eligible for—at most—a credit of only $5,000.
This sunset has now been extended one year. That means that it will need to be extended again before the end of 2011. For the present, however, this extension comes as very welcome news for families considering adoption or in the adoption process.
Specifically, the provisions contained in the health care bill include:
•The current adoption tax credit has been extended until the end of 2011;
•The value of the adoption tax credit has been increased from $12,170 to $13,170.
•The increase is “retroactive,” meaning that any adoption occurring after January 1, 2010 is eligible for this higher credit.
•The credit is now refundable. This means that even families that owe zero taxes can receive the full tax credit in the form of a tax refund to help with their adoption-related expenses.
To read the bill itself, click here and read page 903 of 906.
This HUGE!!!!! Especially for families like our's!! Because Vince is an ordained minister, he's considered self-employed, which means we have a low federal income tax liability -- we pay self-employment tax instead & the credit does not count toward SE tax. So, with our second adoption we will be able to apply for the refund, and get to benefit from the adoption tax credit!! Yay!!!