Adoption Tax Credit

Adoption Tax Credit

Adoption Tax Credit for Same-Sex Couples

In yesterday’s article on California Same-Sex Marriage, we discussed how same-sex couples generally find themselves excluded from many tax benefits in light of the U.S. Supreme Court’s pending review of California’s Proposition 8 and DOMA. Same-sex couples, however, do qualify for a tax break if they adopt a partner’s child.

The Federal Adoption Tax Credit for a “second parent adoption” may grant qualifying tax payers up to $12,650 per child for certain expenses including legal fees, court costs, and home study fees. It would appear that only same-sex couples qualify for this tax credit and this particular adoption tax credit would not be applicable to a heterosexual couple in the context of a stepparent adoption in California such as when one spouse adopts the child of his or her spouse.

Established in 1997, the adoption tax credit has been helping families offset the high cost of adoption and can be claimed for certain eligible adoption-related expenses. Apparently, the adoption tax credit was made permanent earlier this year. The adoption tax credit applies to all types of adoptions, with the exception of a stepparent adoption, including international, domestic private, and public foster care.

If you have had an adoption-related expense in 2013, the credit may go as high as $13,360 per child, but you should always speak to a qualified accountant who is familiar with the Federal Adoption Tax Credit to see if you qualify for or are entitled to any benefits, credits or exclusions that could substantially reduce your tax liability. You should be sure to read IRS instructions for a qualifying adoption tax credit and consult with a tax professional who can help you determine how to properly calculate the credit or any exclusions for your adoption.

You can read more today about the adoption tax credit for same-sex couples at CNN Money in an article published by Blake Elis on February 25, 2013.

If you need assistance with adoption, please contact an adoption lawyer from Castellanos & Associates, APLC at (323) 655-2105. We look forward to helping you build your family!