Originally Posted by LessTraveledBy
Originally Posted by Polliwog
In January 2012, it will go back to being a non-refundable tax credit that can be used over a six year period. After that it will likely be non-refundable and you would have the six years to use it up or lose it. I don't know your story, but there are lower cost ways to adopt a child. I adopted two of my foster children and DS's adoption cost me $50 and DD's adoption was $90.
Thanks! I am still confused, though... What is the difference between 2012 and later, as we know now? Am I wrong to think that you basically described the same situation twice (6 year period, non-refundable), both for 2012 and after?
Can the tax credit be claimed by the adoptive parents, only, or could someone else claim it, assuming that person had donated to the doption at least the amount of the tax credit?
The problem is that we are not in the USA. Thus foster to adopt, for example, is not possible for us. Our options, it looks like, are domestic infant adoption and int'l from a non Hague country. (Due to the country we are living in right now making things really complicated.)
After 2012, it's set to go back to $5000, still non-refundable. BUT, it keeps being extended, so the chances of it going down to $5000 is slim...
Only the adoptive parents can take the credit. If you do a domestic adoption in the US, you can claim the credit the year you spend the money, regardless of what year you finalize (so you can claim the credit before the adoption is finalized). If you do an international adoption, you claim the credit the year the adoption is finalized, no matter when you spend the money (so you can spend money over the course of 2010 & 2011, and then finalize in 2012, but you couldn't claim the credit until after you finalize...the reason for this is that the credit can only be given if the child is a US citizen, so you have to wait until after the finalization to get that credit, whereas in a domestic adoption, the child is already a citizen at birth). But, as far as I know, you have to be the adoptive parent to get the credit.
Now, *when* an international adoption is finalized differs for each country. When I adopted from Vietnam, a non-hague country, the finalization happened in Vietnam and she became a citizen when we touched ground in Chicago due to the fact that both parents travelled and saw DD in country--had only one of us travelled, the finalization would have happened in the US due to visa regulations. In China, only one parent has to travel for the finalization to happen in China due to Hague regulations, so even if only one of us travelled, it would be considered final for tax purposes in China. I'm not sure how it works in Korea where adoptions aren't finalized for quite some time after the adoption happens.