Monday, January 27, 2014

2014 updated tax credit to make adoption affordable

Making Adoption Affordable


Federal Tax Credit


There is help available.  The federal Adoption Tax Credit provides up to $13,190 for qualifying expenses paid to adopt an eligible child in 2014.  The credit is indexed for inflation and will increase annually.  Eligible expenses include adoption fees, court costs, attorney fees, traveling expenses (including amounts spent for meals and lodging) and other expenses directly related to your adoption.  There is an income limit for this credit.  See www.irs.gov, for the forms and additional information.                      


Corporate Matching Gifts


Further, many large employers offer adoption assistance.  See htttp://benefits.adoption.com/ for a list of employers.  Those payments may qualify for exclusion from your income for tax purposes in addition to the federal tax credit.  You may exclude up to $13,190 from your income in 2014.  So, for example, if your employer offers adoption assistance payments of $5,000 and your total adoption related expenses were $18,190, you could claim $13,190 as a tax credit AND exclude $5,000 from your income.  However, if your total expenses were $13,190, you could not take the credit and the exclusion-the same expenses cannot be counted twice.  The income limits for the tax credit also apply to the exclusion.













Drafted by Brittany Alness, staff member of the Law Offices of Karen S. Law, PLC.
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