Question by : What would be our adoption tax credit, if we adopt twins in 2012? My husband and I are considering adopting two children next year (2012). Either a sibling group of two, or two twins. I know you can't put a price on children, and we would love them more than anything, but we also have to make sure we can afford the adoption fees. We heard that there is an adoption tax credit that we might qualify for after the adoption. I think it was something like $ 13,000.00. How do I know if we would qualify for this? Is the $ 13,000 credit per child, or per year? I don't know if the laws vary by state or not, but we live in Pennsylvania. Thanks so much for any help! Best answer for What would be our adoption tax credit, if we adopt twins in 2012?:
Answer by a chick
Gee, when do I get my 13,000 for having kids?
Answer by Molly
its only valid for adoptions finalized in 2010 and 2011 tax years. Not permanant thing. It is $ 13,000 per child and it must be a special needs child (a foster child could be considered a special needs also)
Answer by Marnie B
I'm not sure what it'll be for 2012, but the information Molly has is incorrect. We adopted a non special needs child as a newborn in 2009 & were able to claim the credit on our taxes for both 2009 & 2010. We didn't get all the money at once, it was split between our returns for both years & I'm not sure of the exact amount.
Adoption Tax Credit
http://leafgardenpress.com/ Adoption Tax Credit
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The earned income credit is a refundable tax extension designed for lower salary working families and individuals. The amount of the extension varies depending on your level of salary and how many dependents you support.
The tax extension can even generate a refund larger than the amount of tax paid in through withholding. For the years 2009 through 2012, the earned income credit is temporarily increased for working families with three or more dependents.
Previously this maxed out at two dependents, and it will revert back to maxing out with two dependents starting in 2013. The easiest way to find out if you qualify for this is to use an application found on the IRS Web site called the EITC Assistant.
This applet will help you determine if you qualify for the earned income credit. There are applets for each tax year, so be sure to click on the correct year.
To be eligible for the earned income extension, both your earned salary and adjusted gross salary needs to be within certain ranges. The amount of the tax extension varies based on your earned salary and how many qualifying children you are supporting in your household.
2010 was be the last year for the taxpayers to receive an advance of their expected earned income extension as part of their regular paycheck. This program was eliminated as part of HR 1586.
Earned salary means wages and net profits from self-employment. Wages are reported on the W-2 form. Self-employment is generally reported on Schedule C or on Schedule F for self-employed farmers.
Investment salary must be $ 3,100 or less for the year to be eligible. Investment salary includes interest, dividends, capital gains, and royalties.
The rules for qualifying children for the purpose of claiming the earned income credit are slightly different than the rules for dependents. Thus it may be possible that a child qualifies as your dependent, but not for EIC; or might qualify you for EIC even though the non-custodial parent claims the dependent.
The qualifying rules include a relationship test, age test, and residency test. To claim a qualifying child you must attach Schedule EIC to your Form 1040.
To pass the relationship test, the child must be related to you by birth, marriage, adoption, or foster arrangement. The child can be your son, daughter, grandchild, niece, nephew, brother, sister, or eligible foster child.
Adopted children are treated the same as children by birth but they must be placed in your care by an authorized placement agency. The age test requires that the child must be age 18 or younger at the end of the year, or the child must be age 23 or younger and a full-time student.
If you care for a person who is totally and permanently disabled, you can claim this person for the earned income credit regardless of the person's age. The residency test requires that the child must live with you for more than half the year and must live with you in the United States.
More than half a year means six months and a day. The residency test means that two people are not able to claim the same child for the earned income credit.
Additionally, your child must have a valid Social Security Number. If your child does not have a valid SSN, then you cannot claim them for this form.
Finally, you cannot claim the earned income tax extension if your filing status is Married Filing Separately. However, if you and your spouse are separated and your spouse did not live with you at any time during the last 6 months of the year, you can file as Head of Household and claim the earned income credit.
To be eligible for the earned income credit, taxpayers need to have a social security number, be a U.S. citizen or resident alien for the entire year, and be between the ages of 25 and 64. Find More Filing For Tax Credits Articles
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