President Barack Obama signed into law HR 3590, the Patient Protection and Affordable Care Act on March 23, 2010, and on March 30, 2010 a separate bill, HR 4872, the Health Care and Education Reconciliation Act of 2010. Both of these new laws included changes to taxes as well as the health care system. One of the changes included the adoption tax credit.
There were a few major changes to the adoption tax credit. Quick points of change to the adoption tax credit for 2010 include:
The adoption tax credit for 2010 is now refundable and will remain so through 2011. Before the adoption tax credit helped pay for tax liabilities, the amount paid out of pocket to adopt an eligible child was subtracted from the family's tax liability. Now, even if an adoptive family does not owe on taxes, they will receive the adoption tax credit as a refund.
Maximum adoption credit has been increased from $12,150 to $13,170 and will remain increased through 2012. The adoption tax credit was supposed to drop back to $5,000 in 2012.
If any amount of the adoption tax credit in previous years was in excess of the adoptive family's tax liability, that amount could be carried over for five years to be used in subsequent tax years to cover future tax liabilities. According to the About.com Tax Planning Guide, those past adoption tax credits can be refunded back to the adoptive family in full in 2010.
In order to claim the adoption tax credit, you will need to submit proof of your family's eligibility.