Adoption Tax Credit Update

A little update on the adoption tax credit.  Although the previous tax credit for adoption expired the new tax credit bill was passed as part of the brand new fiscal package.  Yay!  Kind of...

The old credit was refundable, meaning that if you spent $25,000 on your adoption you could receive the full tax credit back which was around $13,000.  This was amazing considering it would pay for almost half of most adoptions.  Unfortunately the new tax credit that was passed is non-refundable which means that although there still is a large maximum credit (around $10,000) allowed you only are credited the amount you are liable for.  This means that those making the big bucks will receive a larger amount and perhaps even the maximum amount back at the end of the year while those making small fries; with little or no tax liability, will receive little or no refund.

Boo...Blah...Bluh.  I understand the necessity of why they are doing this.  Our government is in deep fiscal mire and to pay out monies not owed from the budget would be unwise.  It just feels like one of those rich getting richer/poor getting poorer deals.  From what I understand the good news seems to be that you can spread your tax liability for the credit out over several years so over time there will be help but for those paying off a personal loan they took out for the adoption the lump sum would have been a real blessing.  C'est la Vie.  In the end I guess I just wouldn't have ever known about the previous awesome credit that just ended.  I hope I don't sound greedy.  I honestly hate that money is even an issue, but it is so I think it's worth discussing.

For those of you who wants some straight facts here's a great FAQ on the topic: