The 2011 Adoption Tax Credit & Second Parent Adoption

Posted on December 13, 2011 by AARCS Law


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One of the first questions that adoptive families ask when embarking on the adoption journey is “how much is this adoption going to cost me?” It is a perfectly reasonable question: many people think they can’t afford it.

To assuage many potential clients, adoption professionals tell them about the Federal Adoption Tax Credit.  Maxing out at a little over $13,000.00, the credit reduces an adoptive family’s tax liability and can even result in a refund if the adoptive family does has little or no tax liability.  While anecdotal evidence indicates that claiming the credit raises red flags with the IRS, and is likely to lead to some questioning, it remains the most significant means of being able to afford an adoption.

Unfortunately, the adoption tax credit does not apply to a married spouse who adopts their spouse’s child (in a second parent or step parent adoption, specifically). However, because same-sex unions aren’t federally recognized, same-sex and unmarried couples who adopt their partner’s child remain eligible for the tax credit according to a New York Times blog published today.

For a more detailed explanation of how the Adoption Tax Credit applies in this situation, feel free to visit Professor Cain’s post about it. For adoption information, please feel free to call AARCS at (415) 200-3600.

Disclaimer: For tax advice, please contact your tax professional. This article is for informational purposes and does not constitute legal advice.





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