One of these momentous occasions in the life of any parent is the day that they successfully adopt a child. While adopting a child is a dream that many parents share, it is a very stressful and costly experience. In some situations, all of the legal bills and procedural expenses can easily add up to more than $50,000. However, one of the advantages of adopting a child has been that there has been a significant amount of tax credits attributed to it in the past.
While there had been significant tax expenses for adoption in the past, one of the biggest concerns that people have had in the last year is whether or not the new tax bill would eliminate these costs. The most recent tax bill did go ahead and eliminate a lot of other deductions that people have taken advantage of. Fortunately, in the final bill, it appears that the adoption tax credit will remain in place. The current tax reform is actually increasing the adoption tax credit to $13,570 (https://news.google.com/news/search/section/q/adoption/adoption?hl=en&gl=US&ned=us). This is about a 1% increase from the prior year. This is a huge advantage for anyone that has to incur the costs.
For those that are becoming new parents, the GOP tax bill that was approved also will continue to provide some of the same tax advantages. This includes providing the same tax credit for families that have children that are under a certain age. While this was rumored to be eliminated, it ended up being a major sticking point and was a necessity for the bill to be approved in the final form. However, it remains to be seen how the tax bill will be affected in the future.
Many people do believe that some of these credits that have been carried forward could be eliminated in the future depending on the financial state of the country in the coming years. Some of the expectations are that the child tax credit and other dependent care deductions could be taken out of the tax code.