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Adoptive Moms Adoptive Moms

need help please

Posted by on Feb. 4, 2013 at 9:55 AM
  • 8 Replies
We are trying to file for our adoption tax credit. I am currently pregnant and our house needs our heat fixed, some electric work, etc. We REALLY need it. We have a special needs so I know we get the whole amount but they are trying it split it up bw this year and next. Is there a way around that?
by on Feb. 4, 2013 at 9:55 AM
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Blessdwith5
by Member on Feb. 4, 2013 at 10:22 AM

 The credit is applied to the amount of taxes you owe for the year.  In 2012, the max credit (which you quality for since you adopted a special needs child) is $12,650.  It sounds like the amount you were taxed by the gov't for the income you received last year is less than $12,650.  For example, let's say you made $20,000 last year and the tax you owe the IRS on that amount is $6,000, the IRS can only give you $6,000 of the $12,650 adoption tax credit and allow you to apply the remaining $6,650 next year (or the year after). You have up to five years to use all of the credit. 

"Any adoption credit in the year 2012 or later that is in excess of your federal tax liability can be carried forward to the subsequent tax year. Excess adoption credits can be carried-forward for up to five years is used up on a first-in, first-out basis."

So, to answer your question, there really isn't any way around. it. :(

 

blessedbyGod141
by on Feb. 4, 2013 at 10:31 AM
Is it mandatory to split it? Or is it an option
Blessdwith5
by Member on Feb. 4, 2013 at 10:57 AM
1 mom liked this

It's not really a mandatory or optional decision.  Since it's only a credit towards what you already owe (and not refundable) you can only receive credit for the taxes you owed for the year.  The only way you could have received more is to have owed more taxes for the 2012 tax year which usually means you would have had to make more money to owe more taxes.

The best way I can explain is like a gift card.  Someone gives you a gift card for $100, you get to the store to use it but only have a $25 purchase.  You hand them the gift card, and they take out the $25 you owe but they don't give you back the $75 you have left over, it still remains a credit that you can use at a later date.  Consider the taxes you owe as a purchase, and the adoption tax credit as a gift card, you can't receive what you don't spend.  Does that make sense?

It would be nice if the adoption tax credit were refundable like it was in 2010 and 2011.  In that case, they would have given you back the $75 dollars in cash. 

I hope this helps. 

SarahSuzyQ
by Sarah on Feb. 4, 2013 at 1:07 PM
You can only receive a credit that is equal to the amount you owe in taxes. If you owe less than $12k then you will have to carry it over to future years.

It is no longer one refundable amount.

BW5's explanation is really great.


Quoting blessedbyGod141:

Is it mandatory to split it? Or is it an option

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Blessdwith5
by Member on Feb. 4, 2013 at 2:03 PM
1 mom liked this

 Yours was more succinct. :) 


Quoting SarahSuzyQ:

You can only receive a credit that is equal to the amount you owe in taxes. If you owe less than $12k then you will have to carry it over to future years.

It is no longer one refundable amount.

BW5's explanation is really great.


Quoting blessedbyGod141:

Is it mandatory to split it? Or is it an option


 

blessedbyGod141
by on Feb. 4, 2013 at 2:17 PM
I don't understand how you adopt a child, from the state, a special needs child. You are promised this money for two years. Money that is not wanted but needed desperately and Obama just cuts it off. Nope it doesn't matter if you unselfishly take in a child, good luck. We were counting desperately on this. He sure isn't cutting back on his vacations or his salary is he? I don't know what we are going to do now.
aprilz1225
by Silver Member on Feb. 4, 2013 at 4:31 PM

 does your state offer tax credit or things for special needs adotion? some states do

SarahSuzyQ
by Sarah on Feb. 4, 2013 at 5:58 PM
1 mom liked this

You can still receive the entire amount in terms of having zero tax liability for the next 1-5 years.

I'm sorry you feel that you were promised something that has not materialized. I fostered my son through 2010 and 2011 with full awareness that the refundable part of the credit was due to expire. I'm not sure why it was ever made refundable, but it was always for just that limited time. The rest of us receive a regular credit, which honestly, will still give us a much bigger tax refund than we've ever had before.

I think the National Council for Adoption and the Save the Tax Credit folks are still lobbying to make it refundable. Perhaps they can help you contact your senator, etc. 

Quoting blessedbyGod141:

I don't understand how you adopt a child, from the state, a special needs child. You are promised this money for two years. Money that is not wanted but needed desperately and Obama just cuts it off. Nope it doesn't matter if you unselfishly take in a child, good luck. We were counting desperately on this. He sure isn't cutting back on his vacations or his salary is he? I don't know what we are going to do now.



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