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Massachusetts – House Rejects $1000 Tax Credit for Adoption

Report that the House in Massachusetts rejected a proposed $1000 state tax credit for adoption.

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Adoption Tax Credit – Legislation Introduced To Make It Refundable

According to this article, the last time the adoption tax credit was refundable was in 2010-11.  While the American Tax Pay Relief Act in January 2013 made the adoption tax credit permanent, it did not include the ability to make it refundable.  This harmed low-income families unable to fully take advantage of the credit.  Legislation has just been introduced to make the adoption tax credit refundable thereby helping low-income families take full advantage of the adoption tax credit which will hopefully support and encourage more adoptions.

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Top Ten Adoption Tax Credit Facts to Consider

This article reviews the top ten adoption tax credit facts to consider.

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Adoption Tax Credit Tips

Read about latest adoption tax credit tips here.

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Kentucky -> State Income Adoption Tax Credit Proposed

According to this report, Kentucky State House Democrat Caucus Leader Rocky Adkins filed a house bill seeking to help Kentucky families with adoption costs by providing Kentucky residents with a proposed state adoption tax credit.

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Adoption Tax Credit also available for Foster Care Adoptions

This article states that the adoption tax credit is also available for foster care adoptions.

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2017 Adoption Tax Credit & IRS Cost of Living Adjustments (COLAs) Just Announced

The IRS just released the 2017 Cost-of-Living Adjustments (COLAs) which include changes to the Adoption Tax Credit for special needs children and some qualified adoption expenses for children that are not special needs.

For employer-provided adoption assistance, the maximum that can be excluded from employee income under an employer-provided adoption assistance program increased by $110 from the 2016 amount to $13,570.

For individuals, the maximum adoption credit allowed for a child also increased by $110 from 2016 to $13,570.

The 2017 COLAs also allowed for $1,620 in additional modified AGI before 2017 phaseouts begin.   Employer exclusions and individual credits begin phaseouts for modified adjusted gross incomes greater than $203,540 and entirely phase out for individuals with modified adjusted gross incomes of $243,540 or more.

Note:  Even with an understanding of phase outs, you must consult with a qualified tax professional as there are differences in the amounts of exclusions/credits you may be able to receive dependent upon whether the adopted child is considered by the IRS as a child with special needs or a child without special needs (only qualified adoption expenses).

Additional Resources:  IRS COLA info here.

 

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$13,460 is Maximum Adoption Tax Credit for 2016

According to this article, the maximum adoption tax credit for 2016 is $13,460.  Please discuss with your accountant to find out if you are eligible and if there are phaseouts.

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