Good news for adoptive families from the health care bill just signed into law March, 2010. Included in the bill were favorable changes to the Adoption Tax Credit.

* The maximum credit was increased from $12,150 to $13,170
* The credit is extended through December, 2011.
* The credit was made refundable. If a family has no tax liability, the IRS will refund the
amount due.

All Special Needs adoptions qualify for the full credit even if the expenses were less than $10,000. For families whose income tax obligation is less than that amount, the credit can be spread over more than one tax-year.

There is a generous upper limit on income. Families who pay no taxes cannot benefit from this law. For further information consult the Internal Revenue Service or your tax advisor.

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