Are any of our adoption expenses tax deductible?

In May 2001 the tax laws pertaining to the deductibility of adoption expenses were changed. The new law, which applies to adoptions which become "final" after December 31, 2001, provides for a $10,000.00 tax credit for "allowed" adoption expenses (doubling the previous credit of $5,000.00) in cases of independent and agency adoptions. It also raises from $75,000.00 to $150,000.00 the "adjusted gross income" base which must be met before phase out of the right to enjoy the full tax credit begins. The law also continues to apply to unsuccessful/failed adoptions. Among the other provisions of the revised law Congress eliminated the sunset provision on the old tax credit which would have caused the tax credit to expire in December 2001 and indexed the credit for inflation. The new law also increases the amount of money which employer may provide to employees tax free to help subsidize adoption efforts. To determine how much of your adoption expenses will be allowed as a tax credit on your federal income tax return please contact your tax preparer or accountant as the new adoption tax credit law will make a major financial impact for the better on the vast majority of adoptive families.