Can we use our adoption tax credit this year?

The adoption credit is claimed in the year the adoption becomes final.

The credit is worth $11,650 for 2008 if you have adopted a special needs child. If he had not been special needs the credit would be limited to the actual expenses you had incurred for the adoption. He has to have been determined special needs by the state and you have to have paperwork that states so.

Credits such as the Adoption Credit are deducted from the tax that has been figured from your taxable income. If you do not have enough tax left after deducting other credits, then you may not be able to use all of the Adoption Credit.

This is one credit that you can carryover to the next year. Most other credits are lost if you do not have enough tax liability.

On next years taxes the same happens. If you do not have enough tax liability to use up the balance from this year, it carrys over to 2010.

You have 5 years to use up the complete credit.

Congratulations on adopting a son. God Bless you for including a special needs individual in your family.

Laura H – H&R Block – Senior Tax Advisor 5

**This advice was prepared based on our understanding of the tax law in effect at the time it was written as it applies to the facts that you provided.

The adoption credit is not spread over five years. You get it all at once if you can use it - but if you don't have enough tax liability to use up all of your credit, you get to carry the remainder forward for up to five years to wipe out future tax liability.

its in basic terms valid for adoptions finalized in 2010 and 2011 tax years. not permanant element. it truly is $13,000 according to baby and it would be a particular desires baby (a foster baby must be seen a particular desires additionally)