Child tax credit: what is the adoption tax credit and who is entitled to it?

0
8


Ppeople who plan adopt a childin addition to realizing their dream of becoming parents, have a tax credit offered by the government to reduce the high economic costs associated with this.

Expensive adoption process

For those who choose to pass Adoption agencies or privately, the process averages between $5,000 and $40,000.

However, the federal government wants to encourage adoption and is therefore offering a $14,890 tax credit for this year.

In this sense, any person who bears the cost of adopt a child This benefit is available to persons under 18 years of age or any age but with a physical or mental disability.

It should be noted that the child may be a US citizen or an alien, resident or non-resident. However, if the child was born in the country, a person who wants to adopt a child can apply for a loan at the beginning of the legal process.

Credit is non-refundable

Notably, the credit is not available to taxpayers with incomes above $263,410 this year.

The credit covers all reasonable and necessary costs of an adoption, including adoption fees, legal fees, attorneys’ fees, travel expenses (including meals and living away from home), and other costs directly attributable to the legal adoption of an eligible child.

It should be clarified that the loan is non-refundable, meaning that you will only benefit from it if you owe federal income tax.

However, any unused amount of the loan may be carried forward to reduce tax liabilities over the next five years until the loan is depleted.

In the event that your attempt to adopt a child fails, you may also receive a full tax credit the following year.

.



Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here