Child tax credit: what is the tax credit for adoption and who is entitled to it?

Ppeople who plan to adopt a childin addition to realizing their dream of becoming parents, benefit from a tax credit offered by the government to reduce the high economic cost.

Expensive adoption process

For those who choose to go through a adoption agency or privately, the process costs on average between $5,000 and $40,000.

However, the federal government wants to encourage adoptions and therefore offers a tax credit whose amount established for this year is $14,890.

In this sense, anyone who incurs expenses for adopt a child under the age of 18, or of any age, but who has a physical or mental disability can access this benefit.

A point to note is that the child can be a U.S. citizen or an alien, whether a resident or non-resident alien. However, if the child was born in the country, the person who wants to adopt the child can apply for the credit at the beginning of the legal process.

Credit is non-refundable

It should be noted that the credit is not available to taxpayers whose income exceeds $263,410 this year.

The credit applies to all reasonable and necessary adoption expenses, including adoption expenses, court costs, attorney’s fees, travel expenses (including meals and accommodation outside home) and other expenses directly related to the legal adoption of an eligible child.

It should be noted that the credit is non-refundable, meaning you will only get it if you owe federal income tax.

However, any unused credit amount can be carried forward to reduce your tax liability for the next five years until the credit is exhausted.

If your attempt to adopt a child fails, you will also be able to benefit the following year from the full tax credit.

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