2010 Adoption Tax Credit - New IRS Guidance - John R. Dundon II, Enrolled Agent
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2010 Adoption Tax Credit – New IRS Guidance

2010 Adoption Tax Credit – New IRS Guidance

IRS on Wednesday issued guidance on the expanded adoption credit included in the health care reform legislation passed earlier this year. The Affordable Care Act raises the maximum adoption credit to $13,170 per child (from $12,150 in 2009) and makes the credit refundable. The credit is generally based on the reasonable and necessary costs related to legal adoption, including adoption fees, court costs, attorney’s fees and travel expenses (note: income limits and other special rules apply).  In addition to completing Form 8839 (Qualified Adoption Expenses), eligible taxpayers must include with their 2010 tax returns one or more adoption-related documents. The documentation requirements force those claiming the credit to file paper returns.  The specific guidance is as follows:

  • Revenue Procedure 2010-31, which provides safe harbors for determining the finality of foreign adoptions for purposes of the adoption credit under § 23 (redesignated § 36C after 2009) and the § 137 exclusion for employer reimbursements.

  • Revenue Procedure 2010-35, which modifies Rev. Proc. 2009-50.

  • Notice 2010-66, which provides interim guidance on the adoption credit.



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