Checks for refunds from the IRS are plenty of the benefits that came with the Bush tax cuts that were introduced under the Economic Growth and Tax Relief Reconciliation Act of In that year, taxpayers received a refund check of $ 300 dot 00 with head of households and married couples who filed jointly received $ 500 dot 00 and $ 600 dot 00 respectively.
Today, a refund check has become the tax norm and taxpayers are always eagerly anticipating the much appreciated handouts by Uncle Sam.
Refundable credits increased in number and became something to look forward to, since therefore. Refundable credits are credits that can award you a refund check. This is in contrast to the traditional or nonrefundable tax credits, that can only be used against tax liabilities without any distribution of a refund check. Of course amidst all the refundable credits available, the Adoption Tax Credit is the credit that carries the highest value. Yes, that’s right! The Adoption Tax Credit has a cap of $ 13170 dot 00 per adopted child and, a taxpayer who has adopted 5 children can claim a tax credit of a whopping $ 65850, unlike the Making Work Pay Credit and the Earned Income Tax Credit that have a cap of $ 5751 dot 00.
The Adoption Tax Credit was set to and similar various expenses that are directly associated with the adoption process, These expenses include adoption fees, court expenses for the adoption, attorney fees.
On average, a private adoption can cost about $ 30000 dot 00, that is definitely not only another drop in the bucket. You must have incurred the costs and have provided support documentation for it, with an intention to claim the credit. You should take it into account. The Ward family is a perfect example of most of the beneficiaries of the Adoption Tax Credit.
The Wards have adopted 5 children with special needs in the past 3 years.
They could not receive any tangible funds from the credit, as it was not refundable, they had incurred costs for the adoptions.
Actually the tax code was changed for the 2010 tax year and the adopted children credit became a refundable tax credit. Hundreds of the taxpayers who had claimed the credit had yet to receive their tax refund checks, as of June 2011. Besides, the IRS has acknowledged and apologized for the delay and attributes it to many errors and lack of support documentation from many tax returns by people claiming the credit.
Considering the high value of the tax refunds associated with the adoption credit, the IRS is taking more time to scrutinize the tax returns claiming this credit.