For those of You who Already Have Your Adoptive Child

How has the Tax Credit worked for you? Also, did you know that there is a Bill in Congress to raise the Tax Credit to $15,000. There is a link on the NB website, but my DH says b/c of Iraq, this bill will not get looked at for a long time. If we write our Assemblymen it would help get it noticed.

Re: For those of You who Already Have Your Adoptive Child

Its great! The current amount (05) is something like $10,635.00. Its actually a Tax Credit so it comes off the final amount of tax you owe. If you dont use the entire credit in one year you can roll the remaining amount forward.

Re: For those of You who Already Have Your Adoptive Child

It is all a bit confusing to me, but say you pay 7,000 into your taxes and that you end up getting back 6,000 as a refund, do you get an additional 6,000 or 7,000 ??

Re: For those of You who Already Have Your Adoptive Child

.....say you pay 7,000 into your taxes and that you end up getting back 6,000 as a refund, do you get an additional 6,000 or 7,000 ??

The way I understand it is the credit comes off your your Federal tax amount - so when your taxes are calculated let's say your fed tax amount is 15,000, the credit comes off the 15,000 and the remainder is your tax amount for the year. Then you would look at what you paid in federal taxes and determine what you get back (or owe). For example

Fed Tax Due 15,000
Adoption Credit (10,000)
Actual Fed Tax Due 5,000

Fed Taxes Paid 12,000

Fed Tax Refund 7,000

I am not an accountant or tax advisor this is simply my understanding of how the adoption tax credit works.

Re: For those of You who Already Have Your Adoptive Child

okay, then you can continue to the next year if you did not use up your credit?

Thank you.

Re: For those of You who Already Have Your Adoptive Child

My friends used an accountant and he was able to find other little areas for them to deduct to get an even better return. You can keep using the credit until you reach the full amount, but I think for most of us on LI we pay a lot in all taxes

Re: For those of You who Already Have Your Adoptive Child

The amount that you can deduct decreases with the amount of money you make over $150,000 so your accountant might have to be a little creative to get you back all the money if you are over that limit.