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23
May

Your State Adoption Tax Credit — and How You Can Protect It

As the continued existence of the Federal Adoption Tax Credit comes into doubt during Congress’ upcoming tax reform legislative sessions, many adoptive families and adoption professionals are worried — and rightly so. Adoption tax credits are a huge factor in making the adoption process more affordable for families across the United States, creating more prospective homes for waiting children.

But, while you may be aware of and support the federal adoption tax credit, you may not know about a smaller, more local resource available to you — your state adoption tax credit or refund. Like the federal tax credit, your state adoption tax credit deserves your attention and support, too.

But, first, it’s important to understand exactly which states offer adoption tax credits. Here’s a list of them:

  • Alabama: $1,000 per child for a private intrastate adoption or adoption of a qualified foster child
  • Arkansas: 20 percent of the federal adoption tax credit
  • Georgia: $2,000 per child for children who were adopted from state foster care
  • Iowa: $2,500 tax credit
  • Kansas: Up to 75 percent of your federal adoption tax credit
  • Michigan: $1,200 refundable tax credit
  • Ohio: Up to $10,000 tax credit
  • Utah: $1,000 tax credit

Unfortunately, as you can see, not all states offer additional tax credits or deductions for families who adopt. Some states, like Wisconsin, are actively undergoing legislative discussions to update their tax codes — but not all support the existence of adoption tax credits. Those legislators who are unaffected by adoption may not understand the whole aspect of the adoption tax credit — which is why it’s so important for you to let your local representative hear your voice!

Whether or not your state is actively debating your adoption tax credit or deduction, it’s always a good idea to show your representatives your support at any time. When you make clear how much your current adoption tax credit means to you (or how much your state should implement one), it emphasizes to your representative the importance of this resource — and will let them know what their constituents value in case the adoption tax credit is ever brought to the table for discussion.

You can contact an adoption attorney for more information on the state adoption tax credit and any upcoming legislation here.

To get involved and make your voice heard, contact your state representative by finding them on your state legislative website, please share to spread awareness of the importance of adoption tax credits, and fight to keep as many adoption resources available to American families as possible.

19
May

Your Voice Matters – Help Save the Adoption Tax Credit!

As many adoptive families know, the adoption tax credit (ATC) helps make adoption more affordable, giving safe, loving, permanent homes to as many children as possible. But now, the credit is vulnerable and may be eliminated as part of tax reform — and we need your help to save it! Join us as we work to keep pressure on Congress to save the credit that makes it possible for all families to adopt.

As an adoptive family, you can help by sharing your story and creating a surround sound of voices defending the credit and asking that it be made refundable. Now is the time for you to let your legislators know what the adoption tax credit has meant for you and your family.

Your voice matters — Congress will only #SaveTheATC if they understand the real-world impact and feel that their constituents support it. Here’s how you can take action now:

Share Your Story with a Video Message

Follow these easy steps to share your story directly with your Members of Congress:

  1. Click here. Using your phone or computer with a camera:
  2. Click Send Video. A new window will pop up — click Make a Video.
  3. The camera will turn on, and you’re ready to record! Click the red button to start recording.
  4. When you’re done telling your story, click the red button again to stop recording.
  5. Review your video to make sure it’s what you want, and re-record if you want to make any changes.
  6. Click Send Video Message — and you’re done!
  7. Enter your info or log in with Facebook — it will ask you if your zip code is correct. Click confirm to send the message to your Members of Congress!
  8. Click the Facebook and Twitter buttons to share immediately with others and encourage them to take action too!

Find your U.S. Senators and Representatives here.

Spread the Word on Social Media

Don’t stop there! Once you’ve recorded your story, make sure to share it on Facebook and Twitter. Here are some sample tweets and posts that you can share:

Sample Tweets

  • The adoption tax credit made adoption possible for me and my family. Watch my story here [LINK] #SavetheATC #taxreform
  • .@(Your Member of Congress) Without the adoption tax credit, I wouldn’t have been able to afford adoption. My story here [LINK] #SavetheATC #taxreform
  • For me and thousands of families, the adoption tax credit made adoption possible. Watch my story here [LINK] #SavetheATC #taxreform

Sample Facebook Post

  • Without the adoption tax credit, I would not have been able to bring home my child[ren]. Watch my story here! [LINK]. Please join me and tell Congress we must save this credit! #SavetheATC #taxreform

Save the Adoption Tax Credit also provides tips for calling your Members of Congress, as well as a sample script you can use when contacting your Senators and Representatives to tell your story.  

For more information about the Adoption Tax Credit and legislative proposals important to adoptive families, visit adoptiontaxcredit.org.

26
Jan

Adoption Tax Credit 2015 [Infographic]

Adoption Tax Credit 2015 - small teaserNow that 2015 has come to a close – and we’re finally getting used to writing 2016 on our dates – many families will begin to prepare their finances for tax season. As you do so, don’t forget to look into the Federal Adoption Tax Credit.

For 2015, the maximum adoption tax credit is $13,400 for all qualifying adoption expenses. The adoption tax credit is not refundable, which means that only those individuals with tax liability (taxes owed) will benefit. The credit will remain flat for special needs adoptions (those involving children who are deemed hard to place by a child welfare agency), allowing those families to claim the maximum credit regardless of expenses.

The adoption tax credit income limit is based on modified adjusted gross income (MAGI) and is recalculated each year. In January 2013, the Federal Adoption Tax Credit was made permanent, although the credit could change or be eliminated in the event  of future tax code reform. See the infographic at the bottom of this post for more information on how the tax credit can help your family.

If your family also lives in a state that offers an adoption tax credit (amounts vary by state), you may receive credit for additional expenses as well.

Read more about the Adoption Tax Credit, qualifying expenses and how employer reimbursements could affect your tax credit status on our website. And follow the American Adoptions’ blog for any new updates on the adoption tax credit.

Haven’t Yet Finalized Your Adoption Placement?

Learn How to Seek the Adoption Tax Credit Before Finalization

Every year, adoptive families ask if they can file taxes without their child’s social security number, which is typically received after the adoption is finalized.

Your adoption attorney should apply for a SSN along with the final amended birth certificate after the finalization court hearing. If you do not have these items yet, you our your accountant and/or tax representative can apply for a temporary tax identification number for the baby. You can file your taxes with that number.  Here is a link to Form W-7A for information aboutobtaining a temporary tax ID number. You can also search the IRS website for Adoption Taxpayer Identification Number information.

For more information on the adoption tax credit and exclusion, visit www.irs.gov. American Adoptions recommends that you contact a local accountant or qualified tax professional for more specific information for your family. 

Adoption Tax Credit 2015 - smaller

The Federal Adoption Tax Credit needs your help!

Currently the Federal Adoption Tax Credit is nonrefundable, so it can only help certain families. Because of this, the Save the Adoption Tax Credit Working Group is currently working with members of Congress in an effort to preserve the tax credit and make it a refundable credit. As a refundable credit, every adoptive family within the MAGI range would benefit, making adoption a more affordable option for our families. Learn more about how you can help advocate for a refundable credit.

15
Jul

2015 Adoption Tax Credit Info: How does it work?

Adoption Tax Credit 2015 - small teaserLast month, the IRS released updated figures for the 2015 Adoption Tax Credit. Below we have provided a brief explanation of the Adoption Tax Credit, the updated amount available to families for the 2015 tax season, and an infographic to help families understand how the Adoption Tax Credit works.

What is the Federal Adoption Tax Credit?

The Federal Adoption Tax Credit can help families offset the costs of qualifying adoption expenses, making adoption possible for some families who could not otherwise afford it. Families who adopted a child, or tried to adopt a child, and paid qualifying expenses may be eligible for the credit.

With the passage of the American Taxpayer Relief Act of 2012 the Adoption Tax Credit became a permanent part of the tax code. However, the tax credit is not refundable, which means that only those individuals with tax liability (taxes owed) will benefit.

The maximum adoption tax credit for 2015 is $13,400. The Adoption Tax Credit limit is based on modified adjusted gross income (MAGI) and is recalculated each year based on current cost of living. For the 2015 Adoption Tax Credit, the maximum amount available will begin to phase out for families with MAGI above $201,010 and will be unavailable to families with incomes around $242,010 or above.

The infographic below further outlines how the federal adoption tax credit operates:

Adoption Tax Credit 2015 - smaller

 

For more information on the adoption tax credit and exclusion, read 2015 Adoption Tax Credit or visit www.irs.gov. American Adoptions recommends that you contact a local accountant or qualified tax professional for more specific information for your family.

Visit our Adoption Costs section for other ideas for paying for adoption, or read how American Adoptions helps you adopt within your budget. You can also speak with an Adoption Specialist at 1-800-ADOPTION with any questions about cost and financing.

7
Jan

Adoption Tax Credit 2014 [Infographic]

Now that 2014 has come to a close, many families will begin to prepare their finances for tax season. As you do, don’t forget to look into the Federal Adoption Tax Credit.

For 2014, the maximum adoption tax credit is $13,190 for all qualifying adoption expenses. The adoption credit is not refundable, which means that only those individuals with tax liability (taxes owed) will benefit. The credit will remain flat for special needs adoptions (those involving children who are deemed hard to place by a child welfare agency), allowing those families to claim the maximum credit regardless of expenses.

The adoption tax credit income limit is based on modified adjusted gross income (MAGI) and is recalculated each year. In January 2013, the Federal Adoption Tax Credit was made permanent, although the credit could change or be eliminated in the event of future tax code reform. See the infographic at the bottom of the post for more information.

If your family also lives in a state that offers an adoption tax credit (amounts vary by state), they may receive credit for additional expenses as well.

Read more about the Adoption Tax Credit, qualifying expenses and how employer reimbursements could affect your tax credit status on our website. And follow the American Adoptions’ blog for any new updates on the adoption tax credit.

Haven’t Yet Finalized Your Adoption Placement?

Learn How to Seek the Adoption Tax Credit Before Finalization

Every year, adoptive families ask if they can file taxes without their child’s social security number, which is typically received after the adoption is finalized.

Your adoption attorney should apply for a SSN along with the final amended birth certificate after the finalization court hearing. If you do not have these items yet, you or your accountant and/or tax representative can apply for a temporary tax identification number for the baby. You can file your taxes with that number. Here is a link to Form W-7A for information about obtaining a temporary tax ID number. You can also search the IRS website for Adoption Taxpayer Identification Number information.

For more information on the adoption tax credit and exclusion, visit www.irs.gov. American Adoptions recommends that you contact a local accountant or qualified tax professional for more specific information for your family.

Adoption Tax Credit - smaller

8
Nov

Adoption 101: The Adoption Tax Credit [Infographic]

Some adoptive families find that adopting a child can put a strain on family finances, so many families rely on the federal adoption tax credit to help offset some of their adoption expenses.

What is the Federal Adoption Tax Credit?

The Federal Adoption Tax Credit can help some families offset costs for qualifying adoption expenses. The adoption credit is not refundable, which means that only those individuals with tax liability (taxes owed) will benefit.

The maximum adoption tax credit for 2014 is $13,190. The adoption tax credit income limit is based on modified adjusted gross income (MAGI) and is recalculated each year based on current cost of living. For the 2014 Adoption Tax Credit, the maximum amount available will begin to phase out for families with MAGI above $197,880 and will be unavailable to families with incomes around $237,880 or above.

The infographic below further outlines how the federal adoption tax credit operates:

Adoption Tax Credit - smaller

For more information on the adoption tax credit and exclusion, read 2014 Adoption Tax Credit or visit www.irs.gov. American Adoptions recommends that you contact a local accountant or qualified tax professional for more specific information for your family.

Visit our Financing on Adoption section for other ideas for paying for adoption, or read how American Adoptions helps you adopt within your budget. You can also speak with an Adoption Specialist at 1-800-ADOPTION with any questions about cost and financing.

Attention Waiting Families: Just a quick reminder to current families, who are active and waiting for placement: Send us the front page of your federal tax return after completion at the end of the fiscal year because we always need the most current copy of these on file!

14
Mar

We Need Your Help with the Adoption Tax Credit!

The Adoption Tax Credit Working Group, of which American Adoptions is a member, has set a goal of obtaining 30 Co-Sponsors on the Adoption Tax Credit (ATC) Refundability Bills: S. 1056 and H.R. 2144 in 100 days. Already in the last week, outreach efforts have secured two new cosponsors!

Why the urgency?

Tax discussions are underway in the United States House and Senate, and we need to keep the adoption tax credit top-of-mind with legislators and staff. The best way to do that is to demonstrate to legislators that their constituents care about this issue.

Additionally, because refundability was not included in the bill that made the Credit permanent, many adoptive families are still not able to receive this critical support, a fact which some Members of Congress may not yet be aware.

Cosponsorship of the refundability bills is the best way for Members to show their willingness to help protect the adoption tax credit!

Congressman Camp’s tax reform proposal that eliminates the adoption tax credit makes your outreach that much more critical. While his particular proposal may never go anywhere, it has now become the basis from which tax reform discussions will begin. We need to ensure that we have vocal Members of Congress who will fight on behalf of the adoption tax credit and ensure its protection. And the best way to get Members engaged is by hearing from constituents about the importance of an issue. Don’t let the adoption tax credit be threatened by a lack of vocal outreach from families like yours.

What is “tax reform” and how does it relate to the adoption tax credit?

For the past several years, key Members of Congress have been calling for the U.S. tax code to be reformed and simplified. If tax reform occurs, ALL existing tax credits or policies, including the now permanent adoption tax credit, would be subject to review, so there is always a chance that it could be changed or eliminated. The House Committee on Ways and Means and Senate Finance Committees (the two committees with jurisdiction over tax policy) have begun their review of the U.S. tax code and have signaled their interest in continuing to determine which of the existing credits should be eliminated.

In order to ensure that the adoption tax credit not only remains a permanent part of the code, but is also amended to add back in refundability in order to serve the needs of all children in need of adoption, Members of Congress need to be educated about how this credit is affecting you and your family. To learn more about tax reform, go to waysandmeans.house.gov/ or www.finance.senate.gov.

Why is a refundable credit important and how do the bills relate to the overall goal of protecting the credit?

In 2012, Congress took a huge step forward in making the adoption tax credit a permanent part of the code, but failed to include the refundability provisions that would have ensured it benefitted all children in need of permanent homes. In response, Senators Casey, Blunt and Landrieu, and Congressmen Bruce Braley and Rob Wittman introduced S.1056 and H.R.2144 to make the credit refundable and ensure that all families are able to benefit from the credit regardless of income.

Some families will never be able to adopt without the benefit of the adoption tax credit. Others will still adopt, but won’t benefit at all from the tax credit, which means they may face challenges in meeting their children’s needs. The reason for this inequity is simple: A non-refundable tax credit is useless to families who have limited or no tax liability. If we increase low- and moderate-income families’ access to the credit, we make adoption possible for more waiting children.

Right now, the best way for Members of Congress to show their support for the Adoption Tax Credit and the thousands of families that it helps is by cosponsoring these refundability bills. It is the ultimate show of support for the credit and will help in building vocal champions who will fight for its protection through tax reform.

What’s the call to action?

Get educated on the ATC by visiting our website, reading our FAQ section, and liking us on Facebook for frequent updates: http://www.adoptiontaxcredit.org. Please also spread the word with your friends and family who would want to join in the fight to protect the adoption tax credit.

Then engage with your Members of Congress via social media. Find their Twitter and Facebook accounts and follow them. Use social media as another outlet to connect with your Members and ask for their support cosponsoring the refundability bills and protecting the Adoption Tax Credit (make sure to reference the bill numbers S.1056 and H.R.2144). The more your Members hear from you, the better. If they are already a bill co-sponsor, thank them (template here) for their dedication to adoption issues and use social media to let others in your community know of their support.

31
Dec

2013 Adoption Tax Credit Information

Adoption Tax Credit 2013

Now that 2013 has come to a close, many families will begin to prepare their finances for tax season. Read on for relevant information related to the Federal Adoption Tax Credit for this upcoming tax season.

For 2013, the maximum adoption tax credit is $12,970, for all qualifying adoption expenses, and is non-refundable. The adoption credit is not refundable, which means that only those individuals with tax liability (taxes owed) will benefit. The credit will remain flat for special needs adoptions (those involving children who are deemed hard to place by a child welfare agency), allowing those families to claim the maximum credit regardless of expenses.

The adoption tax credit income limit is based on modified adjusted gross income (MAGI) and is recalculated each year. In January 2013, the Federal Adoption Tax Credit was made permanent. However some believe that discussion of tax reform by Congress could change this permanence.

If your family also lives in a state that offers an adoption tax credit (amounts vary by state), they may receive credit for additional expenses as well.

Read more about the Adoption Tax Credit, qualifying expenses and how employer reimbursements could affect your tax credit status on our website. Or follow the blog for any new updates on the adoption tax credit.

Adoption Tax Credit Before Finalization

Each year, a number adoptive families ask if they can file taxes without their child’s social security number, which is typically received after the adoption is finalized.

Your adoption attorney should apply for a SSN along with the final amended birth certificate after the finalization court hearing. If you do not have these items yet, you or your accountant and/or tax representative can apply for a temporary tax identification number for the baby. You can file your taxes with that number. Here is a link to Form W-7A for information about obtaining a temporary tax ID number. You can also search the IRS website for Adoption Taxpayer Identification Number information.

For more information on the adoption tax credit and exclusion, visit www.irs.gov. American Adoptions also recommends that you contact a local accountant or qualified tax professional for more specific information for your family.

Please Note: Tax credit information for the 2014 calendar year has not yet been announced.

4
Jan

Adoption Tax Credit 2013

Adoption Tax Credit 2013The Adoption Tax Credit is Permanently Extended

This week, Congress passed the American Taxpayer Relief Act of 2012 (H.R. 8). This legislation included a permanent extension of the adoption tax credit and was signed into law by President Obama on Wednesday.

The Adoption Tax Credit was set to disappear as of December 31, 2012, but the bill permanently extends the credit and income exclusion for employer paid or reimbursed adoption expenses. While official estimates will be released later by the IRS, the projected maximum amount of the adoption tax credit for 2013 is expected to be $12,770, according to Save the Adoption Tax Credit.

UPDATE: The official maximum amount for the 2013 federal adoption tax credit is $12,970. You can read more about the tax credit on our website: http://www.americanadoptions.com/adopt/adoption_tax_credit 

Please stay tuned for further updates regarding the Adoption Tax Credit. As always, seek the help and expertise of a tax professional or accountant to claim the Adoption Tax Credit.

And thanks to so many of you for advocating to your Congressmen and Congresswomen – this is wonderful news for adoptive families!

4
Oct

Adoption Tax Credit Webinar

Save the Adoption Tax CreditThe Save the Tax Credit Advocacy Group is hosting a Webinar TODAY, Thursday, October 4th at 8:00 pm – 9:30 pm (EST).

In this webinar, you will gain an understanding of:

  • the goals of the Group’s advocacy efforts
  • the history of this tax credit’s existence
  • an overview of the legislative changes
  • the difference between a refundable credit vs. a credit applied toward tax liability
  • the definition of special needs adoption
  • a description of the “flat” distinction
  • an understanding of how the credit stands for 2012 and 2013
  • a description of the adoption tax credit legislation currently in Congress
  • what legislators intend to do during the lame duck session upon their return to Washington, D.C. after the elections

Presenters will also provide helpful advocacy tips and strategies for making your voice heard by your members of Congress, and an adoptive parent and advocate will join the presentation to share their personal experiences with webinar participants.

Follow the link below to register for the free informational webinar: Advocating to Save the Adoption Tax Credit. The webinar will take place TONIGHT, Thursday, October, 4th at 8:00 pm – 9:30 pm (EST).

https://www3.gotomeeting.com/register/279558502

Note: If you are unable to tune into the webinar this evening, it will be posted online in the next several days. We will update you with that link when it is available! 

UPDATE: The webinar recording and slides have been posted at the following link for your convenience!

http://adoptiontaxcredit.org/2012/10/05/webinar-recording-slides-available/

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