Qualified Adoption Expenses

[JanMi]

I have a client who adopted 2 special needs children (hard to place) in 2010, she paid the adoption expenses but was remimbursed by the Department of Health Services. Does she get the adoption credit even though she was reimbursed because the children were special needs?

[kcjenkins]

http://www.nacac.org/postadopt/taxcredit.html

"Because you do not need to document expenses for children with special needs, simply enter $13,170 for 2010 as long as your child receives adoption assistance. [Although 2010 instructions haven’t yet been issued, the 2009 IRS instructions related to special needs adoption state: “If you did not claim any adoption credit for the child in a prior year, enter $12,150 on line 5 even if your qualified adoption expenses for the child were less than $12,150 (and even if you did not have any qualified adoption expenses for this child).”]"

[jainen]

>>2010 instructions haven’t yet been issued<<

For 2010, the credit is not only $1000 higher but it is refundable. However, specific substantiation is required, so the return is not eligible for e-file. The credit is phased out for AGI over $182,520.