Tax Credit or Refund - Which will it be?

Why would anyone look forward to filing their taxes? The only people who may actually look forward to this grand event are those who may be getting a refund. Thankfully, due to the hard work of several adoption advocacy groups, many adoptive parents can look forward to an adoption tax refund and not just a credit this year.
Throughout last year, I read several articles and debates about just exactly how this will work for families. The whole thing can be a bit confusing so here are some articles and links to articles that may help provide you with more info on this topic.

Disclaimer: This article is not meant to provide tax advice on the new adoption tax credit/refund. Therefore, make sure you check with someone who is an expert in this area like a credible CPA.

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Adoption Tax Credit Victory
Now a credit and a refund
March 01, 2010 / Martha Osborne

http://www.rainbowkids.com/ArticleDetails.aspx?id=701

“With the signing of the new health care bill, adoptive parents received some very welcome news. Not only will the adoption tax credit be extended until December 2011, but it has also been increased from $12,170 to $13,170 for adoptions occurring after January 2010. And for the first time, the credit will now be refundable. Families may receive a refund for documented expenses for the adoption of their child.

 What this mean to adoptive families:
 The best news: This new tax law means that adoptive parents may apply up to $13,170 of their adoption expenses toward their taxes owed, thereby decreasing the amount owed overall by this amount. However, the news gets even better. For the first time, families may be getting cash back from the IRS for their adoption expenses. That's right, the credit may now be taken as a refund for the first time. In the event that the couple owes less than the tax credit amount stated, they may receive some or all of the balance as a refund on their Federal taxes.

 The tax credit is important to both international and domestic adoptive families, but it's greatest beneficiaries are the children who will now have permanent families thanks to adoption being more affordable. Many groups and individuals have successfully lobbied to help extend this tax credit beyond its original expiration date of December 2010, and are still seeking to make the tax credit permanent. As we celebrate the extension of the deadline to December 2011, we must also remain vigilant in seeking to make this legislation a lasting gift to the children who wait.”

Seven minute video that has the adoption tax credit and refund information in a “nut shell”.
http://www.youtube.com/watch?v=eQryETwRziA&feature=youtu.be&a
Thanks to Martha Osborn of Rainbow Kids for the link to this video!

There is a lot of tax info in this January Newsletter from a credible CPA:
http://www.heisercpa.com/newsletter.php

IRS website article that deals specifically with the Adoption Tax Refund: http://www.irs.gov/individuals/article/0,,id=231663,00.html

Tax Articles on About.com:
http://taxes.about.com/b/2010/10/04/enhanced-adoption-credit-for-2010.htm

http://taxes.about.com/od/deductionscredits/qt/adoptioncredit.htm

http://taxes.about.com/od/taxglossary/g/refundable-tax-credits.htm

I hope this information is helpful to you. I wish you all the best!

Cherri