How Adoption Tax Credit Benefits Families
DAVID GREENE, HOST:
And let's keep talking taxes and turned to the next installments in our 12 Days of Tax Deductions.
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GREENE: As the debate goes on over the federal budget, we've been parsing some of the deductions and credits in our notoriously complicated tax code. Today, a credit that's actually set to expire at the end of this month. It's the Adoption Tax Credit. It's been around for 15 years, but unless it's extended next year, it will be available only to families who adopt kids with special needs.
A couple of years ago, as part of the health care overhaul, the credit was refundable, which meant more families could use it. Joe Kroll is with the North American Council on Adoptable Children.
JOE KROLL: The most remarkable thing about the credit in 2010, is it not only helped people who adopted in 2010, it helped people of limited tax liability who had adopted in 2005, 6, 7, 8 and 9. Because when you claim you tax credit your tax credit, you have five years to use it.
GREENE: Now the latest numbers from the IRS show that in the year 2010 about 97,000 people claimed the Adoption Credit, costing the government just over $1 billion. Kroll is among the advocates hoping the credit is extended.
KROLL: The only thing that's left is the original permanent credit of $,6,000 based on expenses for families who adopt special needs children in foster care.
GREENE: Tomorrow we will learn about a popular deduction for state and local taxes.
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