What is the tax credit?

In 2010, the maximum credit allowed is the amount of qualified adoption expenses up to $13,170.  The credit begins to phase out for taxpayers with modified AGI in excess of $190,000.  This is not a deduction but a dollar for dollar tax credit.  The adoption tax credit is now refundable.  The adoption credit is calculated on Form 8839 Qualified Adoption Expenses 

How do we avoid a contested adoption?

Educate yourself.  Read books and articles on adoption.  Have an initial consultation with an experienced adoption attorney.  The American Academy of Adoption Attorneys has a membership directory available online at www.adoptionattorneys.org.

With the advice of your attorney, determine which state law will apply to your case and follow the law religiously. The laws will control the methods you use at the outset when searching for birth parents and dictate which expenses you can legally pay.  Address the birth father issue at the very beginning of your discussions with any birth mother.  If the birth father does wish to parent the child, the situation is one you should not pursue.

When can I obtain a Social Secuity Card?

Not until the adoption is finalized and you receive the birth certificate. You can then apply for one at your local office.  

ADOPTION SERVICES

 

An adoption legally creates a parental relationship between a child and an adult. Once an adoption is finalized, the relationship between the parents and child is as if the child had been born to them and the parental rights of the biological (birth) parents are terminated.

Maryland adoption statutes require that any child over the age of 10 years must consent to the adoption. In the District of Columbia any child over the age of 14 years must consent to the adoption. If the adoption is contested, the court will appoint an attorney to represent a child.

Maryland statutes provide for three kinds of adoptions: private agency, public agency and independent/private. In private adoptions arrangements are made directly between the birth parents and the adopting parents. The District of Columbia also allows agency and private adoptions.  Both jurisdictions allow for second parent adoptions.

In Maryland, birth parents who sign consents (which can only be signed after the baby is born) have thirty (30) days to revoke their consent. A birth parent may not revoke their consent if, in the preceding year, the parent revoked consent for or filed an objection to the adoption and the adoptee is at least 30 days old and the consent is given before a judge. After the expiration of the revocation period, a birth parent can only disrupt the adoption if they can prove their consent was obtained through fraud or under duress.

In the District of Columbia, a consent to adoption may be revoked or withdrawn only after a judicial determination that the consent was not voluntarily given.

Regarding the adoption tax credit, as part of the health care bill signed into law by President Obama on March 23, 2010 (Patient Protection and Affordable Care Act P.L. 111-148), the adoption tax credit (ATC) was preserved for 2011 and increased to $13,360 and is now refundable. This means that even families that owe zero taxes can receive the full tax credit in the form of a tax refund to help with their adoption-related expenses.  In cases where families have already finalized an adoption the act allows those past tax year carry forward adoption tax credit amounts to be refunded in cash in 2010. The IRS Guidance 10-66 deals with this issue in Section 3.

The adoption tax credit will NOT be refundable in 2011 but the tax credit has been made available through 2012.  On Friday, Dec. 17, 2010, President Obama signed into law the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, which extended the adoption tax credit until Dec 31, 2012. The Joint Tax Committee says that for 2012, the maximum benefit will be $12,170 (indexed for inflation after 2010). 

Jennifer Fairfax assists in all types of adoptions in the state of Maryland and the District of Columbia.

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