Adoption assistance is exempt from taxation. As with child support that a custodial parent receives from a divorced
spouse, adoption assistance is not considered income. However, the level or amount of assistance may affect whether the child can be claimed as a dependent and be listed as an
exemption on your income taxes. Refer to Adoption Network Law Center's : "Dependency Exemption".
Up to $5,000 in employer-provided adoption benefits (up to $6,000 for special needs adoptions) per child may be
excluded from your income. You may claim both a tax credit and an exclusion in connection with the adoption of an eligible child, but may not claim the same expenses twice. As
with the tax credit, tax-free adoption benefits are gradually phased out once yearly family income rises above $ 155,860.
For information about when the credit can be taken, special needs adoptions and more, please consult your
adoption attorney and financial analyst, or visit the IRS online.
Email or call 1-800-FOR-ADOPT in confidence!
|