The new 2020 adoption tax credit released affecting North Carolina parents.
The new adoption tax credit released affecting North Carolina parents. Adoptions come with many fees that can quickly add up for parents. Federal income taxes are one area where parents can receive some financial relief.
The IRS document 19-44 outlines the adoption credit in .04 of Section 3. Starting in 2020, parents with $254,520 in adjusted gross income or more do not receive the tax credit. Those with a modified gross income over $214,520 may not see as much of the tax credit.
The good news for those who adopt with incomes below these income brackets can find some financial relief up to $14,300 in tax credits. This applies to those children with special needs as well. This does not necessarily mean that parents receive the entire credit, but it is available to help offset the costs of adoption.
Adoption.com recognizes the beauty of adopting whether infants or adults. The state allows single parents, a stepparent with the biological parent’s consent and married couples to adopt a person as long as they have met the six-month residency requirement. The average costs for using an adoption agency range from $20,000 to $40,000 per child.
A home study costing between $2,000 and $3,000 must happen regardless of whether the adoptive parents use an agency or an attorney. Once the adoption is final, parents must still have an updated home study when family changes happen or every 18 months. Parents choosing to adopt a Native American child must follow the Indian Child Welfare Act and may need the guidance of an attorney through the legal process.