With tax season upon us, take a minute to learn about the Adoption Tax Credit and how this benefit can make adoption more affordable.
A form of federal financial assistance, the Adoption Tax Credit lowers your overall tax liability — up to $14,300 per adopted child in 2020! Although currently nonrefundable, any credit in excess of your tax liability may be carried forward for up to five years. In other words, if you don’t have $14,300 in tax liability one year, you can apply the remaining credit to your future taxes.
The credit covers qualified adoption expenses, which include:
- Reasonable and necessary adoption fees
- Court costs and attorney fees
- Travel expenses (including amounts spent for meals and lodging while away from home)
- Other expenses that are directly related to and for the principal purpose of the legal adoption of an eligible child
View this recently recorded webinar to learn more about how the Adoption Tax Credit can help you adopt! Recently, the National Council for Adoption also released an updated guide to Understanding the Adoption Tax Credit.