Could adopting 2 children at the same time in 2010/2011 be entirely free? Yes! Well, nearly if your income meets the guidelines and you choose a country program in the right price range.
As the entire adoption community knows by now, the adoption tax credit will now be a tax refund for adoptions finalized in 2010 and 2011! This is incredible news for children in orphanages everywhere. It gives them a much greater chance of finding adoptive families, now that parents will be refunded for a good chunk of the fees involved when adopting. Even if your tax liability is zero, you will get a refund check from the IRS for your adoption related expenses.
The refund amount for adoptions finalized in 2010 is $13,170. The refund amount for adoptions finalized in 2011 is $13,360. All of this expires on December 31, 2011. If anyone out there is waiting for ‘the right time’ to adopt financially, the time is right now. Adoption is a long process, and the entire adoption needs to be finalized by the end of 2011 to qualify for a refund.
Adopting 2 children at the same time could end up being very close to fee free. I am not a tax expert, but as far as I can tell, families whose modified adjusted gross income is less than $182,520* can claim $13,360 per child. I assume this means that adopting 2 children results in a refund of $26,720. The cost of adopting 2 children from Ethiopia is about $27,000. The cost of adopting 2 children independently from Ukraine is about $28,000. This means that the total out of pocket expenses for adopting 2 children could be as little as $1,000.
I’m happy to help families research costs of other country programs, just ask. There are many other countries in that price range, but I only mentioned two as a quick example.
*Note – for tax year 2011, families with an income between $185,210 – $225,210 are still eligible for a tax credit/refund, but not for the full amount. Incomes over $225,210 are not eligible.
See also About.com Adoption Tax Credit
See also the Journal of Accountancy.