The adopti.on t.ax credit is quite helpful....if you know how to apply for it. Here's what I've found out over the past few days, and I'll use our expenses as an example. We are claiming the credit as a private (not special needs) domestic ado.ption.
We had expenses (agency fees) in the years 2008; 2009; 2010; 2011.
We can't claim all of the expenses on 2011 taxes. Damn.
We have to go back to our 2009 return and amend it for 2008 expenses, then carry over to 2010 anything that we don't qualify for (i.e. it wasn't refundable in those years so if the credit is more than our tax liability, can't get it back).
Then, we amend our 2010 return to include any carry over and 2009 expenses. The credit is refundable for 2010 so we'll get all of the credit (our expenses paid).
In 2011, we claim 2010 and 2011 expenses.
So, if like us, you were utterly confused by the language and thought you couldn't claim the credit until the adoption is final, then some legwork and backtracking is needed to get the full amount. But, I hear this is the way to do it, because if the powers that be deny the full amount (like, we try to take all years on 2011 taxes) then it's a mess to try to get the rest, or it's gone. Not sure which, whatever it is, it's probably a big pain in the ass.
It still might be a pain in the ass.
Need more info? Go to www.nacac.org they have a t.ax credit tab with lots of tips, faqs and an email address. They got back to me within a few days. Score for service!
You can also go to www.creatingafamily.org
Happy ta.x $eason!
We had expenses (agency fees) in the years 2008; 2009; 2010; 2011.
We can't claim all of the expenses on 2011 taxes. Damn.
We have to go back to our 2009 return and amend it for 2008 expenses, then carry over to 2010 anything that we don't qualify for (i.e. it wasn't refundable in those years so if the credit is more than our tax liability, can't get it back).
Then, we amend our 2010 return to include any carry over and 2009 expenses. The credit is refundable for 2010 so we'll get all of the credit (our expenses paid).
In 2011, we claim 2010 and 2011 expenses.
So, if like us, you were utterly confused by the language and thought you couldn't claim the credit until the adoption is final, then some legwork and backtracking is needed to get the full amount. But, I hear this is the way to do it, because if the powers that be deny the full amount (like, we try to take all years on 2011 taxes) then it's a mess to try to get the rest, or it's gone. Not sure which, whatever it is, it's probably a big pain in the ass.
It still might be a pain in the ass.
Need more info? Go to www.nacac.org they have a t.ax credit tab with lots of tips, faqs and an email address. They got back to me within a few days. Score for service!
You can also go to www.creatingafamily.org
Happy ta.x $eason!
Oh my word. I am beyond confused now. We just had our taxes done yesterday (though didn't file yet because we forgot to take baby E's adoption decree with us). So, we paid the bulk of our fees in 2009, he was born in 2010 (paid no $ that year), then paid more in 2011. We claimed it all for last year. Are you saying, we can't claim 2009's fees? That we have to go back and amend 2010's and claim it then? Because I just may cry. Really, I probably will.
ReplyDeleteI know! It's mind-boggling how the rules are written. Seriously, I'm just an engineer and taxes are soooo not my thing. We're going to end up hiring someone to help us with all the work we have to do. Hopefully we can get it done by the due date. Argh.
DeleteI hate that it has to be so flippin' difficult! We had H&R Block do ours, but they don't know squat. I mean, I told them that we had to send in the decree. (Not a good sign, I'd say)
Delete