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Category: Tax
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Experience:  over 40 years experience in tax matters
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My wife and I are foster parents in Pennsylvania. We want to

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My wife and I are foster parents in Pennsylvania. We want to adopt THREE (3) African-American children (sibling group) currently under our care. Will we qualify for the entire adoption Federal/State tax credit defined on IRS website....or will we only be reimbursed out-of-pocket adoption cost?

Welcome to Just Answer. I am here to help you resolve your tax and finance concerns. Please feel free to ask anytime you need extra help.


The adoption credit is limited to the lower of the actual adoption costs or the maximum credit amount. As a brief example let's suppose that actual costs are $5,000 and the maximum credit is $7,000. You would then be entitled to $5,000.

If you need additional information please feel free to ask.

Customer: replied 6 years ago.

I found this at the following:


How Do I Claim the Adoption Tax Credit?


To claim the credit you need to complete IRS Form 1040. (Right now, this links to the 2009 form. The IRS will post the 2010 form later this year.) The IRS will require a copy of your adoption decree and adoption assistance agreement.

What do I do when the IRS asks for qualifying expenses on line 5?

Because you do not need to document expenses for children with special needs, simply enter $13,170 for 2010 as long as your child receives adoption assistance. [Although 2010 instructions haven't yet been issued, the 2009 IRS instructions related to special needs adoption state: "If you did not claim any adoption credit for the child in a prior year, enter $12,150 on line 5 even if your qualified adoption expenses for the child were less than $12,150 (and even if you did not have any qualified adoption expenses for this child)."]


Is any of this correct?

Yes, it is correct. Be sure to use the 2010 instructions and forms and to submit any required documentation. This will not be an efile return because you cannot efile the documents. So you have plenty of time left. The 2010 forms should be released soon if they are not already out.
CGCPA and 2 other Tax Specialists are ready to help you
Customer: replied 6 years ago.
Thank you Charles once again, you have helped me and my family!
You are always welcome. If I can assist in the future please feel free to return.