Adoption can be expensive. For this reason, the government aims to reduce the financial burdens of the prospective adoptive parents through the Federal Adoption Tax Credit or FATC.
Non-refundable since 1997, the FATC allows adoptive parents to reduce their tax obligations. If not consumed within a year, the credit shall be carried over to the succeeding years. Hence, the policy leads up to 6 years of the tax subsidy.
The Affordable Health Act of 2010 has enabled taxpayers to monetarily claim the credit than for it to significantly decrease their taxes. However, this only lasted for two years. It reverted to the non-refundable approach last 2012. The credit value for the year 2017 is $13,570.
The market annually increases the price of basic commodities. Thus, lower tax liability translates to a bigger budget for the child’s needs. Due to the non-refundability of the credit, families with higher tax liability profit the most from the yearly increasing tax credit.
With the credit in mind, more families are now considering adoption. In fact, there is no limit on the children that they can adopt. This results in a possible added tax credit because the latter value depends on per adopted child.
The government can also take advantage from this arrangement. By giving out tax credits, they reduce the children under foster care. Maintaining the latter is costlier compared to sponsoring tax credits.
The State of Arizona offers the Adoption Subsidy Program on top of the Federal Adoption Tax Credit. This includes the adoptive parents and individuals needed for the care of a special needs child.
The subsidy lasts until the child’s 18th year, given that the adoptive parents support the child financially and academically.
Furthermore, the child enjoys the state’s medical, dental, and mental health coverage. The parents can also avail special services, if needed, that are in line with the current state laws.
The state has also provided a one-time reimbursement for the non-recurring adoption fees. The related ones are covered, such as the adoption and attorney fees. The parents shall receive up to $2,000 per child.
In addition, Arizona has its own Department of Child Safety that clamors to promote better beginnings for children.
Any adult aged 18 years old and above are eligible to adopt a child. The following requirements are needed: possession of the court certification, submission of application letter, attendance to adoption training and seminars, and the investigation of the adoptive parent’s social history, references, finances, morality, health, and past federal and state criminal records.
Private adoption agencies can help in the process. It is best to survey and interview agencies all around the state to find one that suits your schedule and preferences.
The State of Arizona and the federal government have made things easier for parents and individuals to adopt a child. When you adopt a family member or relative, there are tax benefits you need to look into that can help reduce your tax liability as a new parent. Get in touch with Robert A. Dodell, Attorney At Law for legal adoption representation.
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