Thursday, October 21, 2010

Adoption Tax Credit and Interest Free Adoption Loans

Many families wonder how they will pay for their adoption!  If your adjusted gross income is less than $222,180 you qualify for an adoption tax refund.  You will be able to claim up to $13,170 in adoption related expenses and receive a refund of this amount.  This is exciting news because you will get this money back dollar for dollar as opposed to a deduction which is just taken off your adjusted income!  No longer will the refund be processed over a 5 year period.  You will be able to claim the entire refund  when you file your 2010 tax return.  This amount is also per child.  This means that for those of you adopting two sibs you can expect a refund of up to $26,340!  This may virtually cover most of your adoption expenses.  You do not need to have paid excess of this amount in tax to expect a refund.  This means that if your income is low and your deductions are high you could see a refund of the entire amount. 

Another great option for families is applying for an interest free adoption loan.  Organizations providing interest free loans include:

Many families find that they are able to pay back their adoption loan with the money they get back from the federal adoption tax credit!  We would love to hear your fundraising ideas!

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