Happy Holidays! Adoption Tax Credit Extended through 2012!

Happy holidays, Holt families!  On Friday, December 17th, President Obama signed the 2010 Tax Relief Act, a package of income tax, estate tax and unemployment provisions – including one huge benefit for adoptive families.  This act extends the adoption tax credit through 2012!

The adoption credit would have sunset in 2011, but now families filing through 2012 may take this credit for adoption-related expenses – reducing their tax bill up to $13,170 in 2011 and $12,170 in 2012.

For families filing in 2011, the tax credit includes one additional benefit: it’s refundable.  This enhancement is not a feature of the Tax Relief Act, but rather the Patient Protection and Affordable Care Act – the massive health care reform legislation enacted earlier this year.

Although the credit will vary for adoptive families, the ultimate outcome is the same.  It eases the financial burden of adopting internationally – enabling more orphaned, abandoned and vulnerable children to have permanent, loving families.  And for that, we celebrate.

To learn more about these benefits, visit the North American Council on Adoptable Children.

45 comments to Happy Holidays! Adoption Tax Credit Extended through 2012!

  • Lisa

    This is great news! But I am still confused. :-) My husband and I are just starting this process and trying to determine if we can make the financial commitment to the adoption process. It sounds like the Tax Credit goes down to $12,170 for adoptions finalized in 2012 (which is probably when we’d realistically be able to finalize an adoption).

    Is this refundable? I know it is for 2011, but can’t find any info anywhere about 2012. Thanks!

  • Hi Lisa,

    Thanks for your question! The tax credit will not be refundable for 2012. You’re right — this extension effectively reduces your tax liability up to $12,170 (adjusted for inflation), but you cannot take a refund on your adoption expenses after December 31, 2011. For more information on the credit or any other questions you might have about the adoption process, contact Holt’s adoption counselor, Emily Lund, at emilyl@holtinternational.org. Cheers!

  • Travi

    From what I understand, the adoption tax credit will expire 12/31/11 unless congress renews it. If it doesn’t get renewed our tax person said the tax credit reverts to pre-2001 levels of only about $5000. And just to clarify, the current tax credit was extended through the end of 2011 not 2012 which means the adoption has to be finalized in 2011. I think this gets confused because people file their 2011 taxes in 2012. We need to contact our US representatives and senators to ask them to support bills currently being passed around congress that would make the adoption tax credit permanent. The US House of Representatives bill is H.R. 184 “Adoption Tax Relief Guarantee Act of 2011″ and the US Senate bill is S.82 “Adoption Tax Relief Guarantee Act”.

  • Dawn Davenport

    Delays in receiving the Adoption Tax Credit refund is probably the most discussed topic this week on every adoption forum or group on the internet. Creating a Family has been inundated with complaints about delays in receiving the Federal Adoption Tax Credit refund and requests to find out what is happening. We have attempted to do just that and posted our summary at http://www.creatingafamily.org/blog/. We present a good summary of the current lay of the land for those who are hoping to get an Adoption Tax Credit refund this year and make suggestions if your return is being reviewed. Please take the survey at the end of this blog regardless if you have received your adoption tax credit refund or are still waiting so that we can get a clearer picture of what is happening and share this with the adoption community.

  • jenna

    Hopefully the government would hear about this. The families should have the refunds by now. Well, don’t really have to wonder about this. Refunds does always take long.

    Please visit me at http://www.financialsolutionscanada.com/

  • Brenda

    My husband and I have been approved for adoption for two months now and haven’t been given any opportunity to adopt a child. So the prospect of ever finalizing in 2011 would be impossible. We don’t want to adopt just for a tax refund because we really don’t need it, but there are so many families that could use the extra money to pay for expenses. I just wish Alabama would work with prospective parents better.

  • Billie McFarland

    Hi, We received our tax money in July so that is better than never. Now on April 1 we have received a new presious special needs child, and if we adopt the monies are cut in half if we adopt verses foster, but we are following what God wants from us. We have already put 4,oo0 into his braces and AZ no longer helps defer that cost so now I pay 400.00 a month for 3 in braces, the tax money we received sure help to make room for one more….I am curious and not always understanding if the adoption is final before 12/31 we will receive 12,170 tax money again. In 2012 tax filing. I am sure it will be final by Oct or Nov. if we do we can pay off all those dental bills. Yea

  • Bridgette

    Hello everyone, I sent my paperwork to the IRS in May, I have not received a refund at this time and this is August. Does anyone know how long does it usually take to get the credit refunded.If you know anything please let me know.

  • Travis

    (Please copy your reponse to my email as I can’t always get to this page as much as I would like to. Thanks)

    I’ve heard that you can claim some adoption related expenses for tax purposes before your adoption is finalized. Is this true? If so it would make sense for us (and I am sure many others) to take these expenses in 2011, when the credit is refunable, instead of waiting until 2012 when the credit it non-refundable. Then we could use the refunded monies to help even more in supplementing the adoption cost’s. Thanks so much in advance for you response!

  • Dianne

    I did not know there was a deadline on the adoption refund! We just received our 797, dossier will go to China in 2 weeks, so we will not travel till early 2012. What are the chances of getting this extended? Does anyone know? Thanks for all the info here!

  • Lorrayne

    We are DTC as of friday and it would take a miracle to travel before 2011 ends and finalize. However if it goes back down to $5000 my DH and I will be frantic :-(

  • Pamela

    What does refundable mean vs non-refundable? Thanks for any info!

  • Jennifer

    My understanding is refundable means the IRS pays you dollar for dollar the amount $12,000 (or whatever the figure is) non refundable means you deduct your tax liability by x amount – rather than get a refund – say you paid $5000 for fed taxes – you deduct this amount from your taxes and that is the amount that year that you receive. In past years they allowed five years to use the adoption credit. Does anyone know if in 2012 you will be given the five years?

  • [...] 9) extended the credit for adoption-related expenses that reduces families tax bill up to $13,170 in 2011 through 2012 with a maximum of $12,170 in credit. [...]

  • Dwight G

    Grandmother adopted her daughter’s three children. Mother has long history of drug addiction and incarcerations. Father was incarcerated at time of adoption for possession and distribution. One child was born with addiction. All are receipients of Fed/State Education program for special needs. Grandmother used pro bono attorney to complete adoption and avoid the emotional/psychological impact of foster care system. IRS has disallowed her credit based on doc from school system and Dept of education. Does she have any altenatives?

  • AllieW

    Do we have a chance seeing the 2012 tax credit ever being a refund like the 2011 tax year? Waiting to be matched with Birth Mother and really planned out to receive the refund for our next adoption so it would make our lives easier (financially, so we would not have to wait to save another $13,170)!!! This is a hard pill to swallow :(

  • Karen

    Help make the adoption tax credit fully refundable for 2012 and 2013 by going to Change.org and sign the Economic Justice Petition: Make adoption fully refundable for the 2012 and 2013 tax year. Your signature is needed. http://chn.ge/ns07q9

  • Karen

    Sign the petition ( http://www.change.org/petitions/make-adoption-costs-fully-refundable-in-the-2012-2013-tax-years ) to make the adoption tax credit refundable for 2012 and 2013 and then follow up by sending a letter to your congressmen.
    This link (http://alturl.com/7r9d6) will take you to a copy of the letter than you can modify and use to send to your Congressmen or Congresswoman. Visit house.gov to see who your representative is. Keep sharing to keep the signatures coming.

  • Brian

    I just filed my taxes today and found out that I am getting the adoption tax credit refunded to me this year. Hopefully I don’t have to wait as long as people did last year.

  • Lori

    I filed my taxes January 19, 2012 with the adoption credit for 4 special needs children. I have not heard anything yet and nothing on the Where’s My Refund website. Anyone heard anything?

  • Brian

    I filed my taxes on 02/13/2012, and after checking the where’s my refund link, I finally have a expected refund date of 04/10/2012. Hopefully nothing changes.

  • Lori

    Finally I have the same message of April 10 BUT I had to resend mine in after 5 weeks. I was advised to resend as they had documentation of ever even receiving my first one even though they were sent certified and received. Oh well, just happy I am hopefully not having to wait til September!

  • Jorge

    Mailed my return FRI 2-17, return receipt said it was received THU 2-23. Just showed up on the IRS web site TUE 3-13 with an estimated completion date of April 17. If they keep to this schedule then that is 8 weeks processing time.

    Would be interested to hear from others if the IRS is keeping to their schedule.

  • Brian

    My refund return date has changed to 4/17/2012, hopefully it doesn’t change anymore.

  • Lori

    Mine was changed to the 17th also….at least they are consistance :)

  • Brian

    I checked the where’s my refund data again, and it states they are reviewing my taxes, and sent me a letter stating more information I need to send in. I recieved a letter stating that they are just reviewing it, and they don’t need any information right now. I’m gonna be calling them, because I’m confused.

  • Lori

    I got the same letter and it said it was under review also and not to contact them for 45 days from the date of the notice which was March 26. I received the letter March 17. Now that confused me! Wheres my refund now says April 10 which was what it was to begin with. I will just pray it comes them. I want to put in a playset for the kids!

  • Lori

    Now I am at under review on the status site. I did get my return back with one thing wrong with it…I forgot to sign it the second time I sent it in…good lord! hopefully soon for us all!

  • Jorge

    Just noticed today that my refund date has been bumped a week to April 24 due to “processing delays”. I hope this doesn’t become a trend.

    I have not received any letters such as Lori and Brian have indicated.

  • Pamela@Missouri

    I mailed my return the end of January and IRS got it Feb 1st. Six weeks later I got the first letter saying do not send anything in and within 45 days I would either get another letter or have my refund. About a week later I got another letter saing to send everything I had already sent in to them again to the Philadelphia, PA office. It has been over 8 weeks and IRS agent says it can still take 8 weeks after they review the documents I resent… then another 45 days to release the money. The problem is they DO NOT scan our documents into their system. They shred our documents & send our return across the country and request them again. It is wasting taxpayer dollars and slowing the process. I believe each return should be checked for accuracy with the ATC- but not in this manner designed to give adoptive parents the run around.

  • Lori

    Well I received my refund today less the adoption credit…Hopefully that will be coming soon!

  • Lori

    That is crazy! I have read from last years posts about them asking for the same information over and over again. Thats is ridiculous. To me it just seems so easy, review it and make it good! Maybe I am naive!

  • Lori

    Got a letter stating I needed to resend everything I already sent. I called, and after 40 minutes on hold was told that they are asking all persons with the Adoption Credit to resend same information. She said she was unsure why they were asking this. I faxed it all over this morning.

  • Lori

    Talked to the IRS this morning and my return wont even be looked at until June. Then, if they dont have what they want they will ask for more. Frustrating!

  • Jorge

    Up until yesterday the Where’s My Refund site said I should receive my refund April 24. No refund today, and the site now says “Your return has been received and is being processed.” No other info given. I haven’t received any sort of notice in the mail, either.

    Tried the 800# and it gives the same non-info message. Will try to get to a live person and see what’s going on.

    Has anyone with an adoption credit actually received it yet? What about user “Brian” – he was first in the queue on this forum with an original refund date a week before mine – anything?

  • Jorge

    Got through to a person at the IRS yesterday. They said that a letter is being generated for me that will indicate an additional 60 days of review needed AFTER I receive the letter.

    I suggest we all write our Congress representative to let them know how the IRS is making this process so hard and delaying it for no reason. By law, we have been given the right to this credit.

    Also, after 60 days, if still no action I will be contacting a Tax Advocate.

  • Lori

    Mine says now May 15 after sending everything in for a second time. We shall see….

  • Lori

    15th here and nothing. Told to wait til June 1 before I call back. They also told me that the “Where’s Your Refund” is never accurate for those who have the adoption credit.

  • Jorge

    Unbelievable! I received letter from IRS saying they needed 45 days for more processing. I checked my bank account today for another reason and found a pending transaction for the full amount I requested on my return. This is about 40 days into the 45-day time. My return was VERY complicated without addition of adoption credit and I was very worred about an audit. However, it has all worked out, and now my expanded family must plan a way to celebrate.

  • Lori

    Received my refund today….YAY…..state of the art playset on it’s way! Kids are gonna LOVE IT

  • cassie

    filed adoption tax end of march hasnt got a letter or refund do you get letter first before refund

  • Lori

    More than likely…..dont expect anything soon and dont rely on Wheres My Refund

  • Brian

    Still haven’t recieved my refund, and called last week to get told that it wouldn’t be reviewed for a while, since they are almost 90 days behind. THey told me not to expect any news until almost August.

  • Brian

    Finally recieved notice that my taxes are being refunded to me tomorrow 6/20/2012, they are even including interest. At least the wait wasn’t for nothing. lol

  • Jorge

    …and now, 7 months later, the IRS wants all their money back, PLUS a 20 percent penalty. I’ve provided all required documentation multiple times, and they keep messing around with me. WHEN WILL THIS NIGHTMARE END???

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