President Obama wants to extend the Adoption Tax Credit for 2012

Under current law, the adoption tax credit is not refundable in 2012 or beyond and, beginning in 2013, would apply only to people who incur qualified adoption expenses in the process of adopting a child with special needs. However, President Obama’s fiscal year 2013 budget proposal would make the tax credit permanent for all adoption types, and maintain the maximum credit regardless of expenses for families who adopt children with special needs. In addition, the budget proposes making the adoption tax credit refundable for both 2012 and 2013.

Congress has not yet introduced legislation that would extend refundability of the credit, but NACAC is working to enlist members of Congress to sponsor such a bill and will alert our network as soon as there is legislation to lobby for.

Wonderful news! I found this information here.

Adoption Tax Credit 2012 and Beyond

The adoption tax credit is refundable for both 2010 and 2011. Under current law (which could still be changed), the tax credit is as follows in 2012 and 2013:

2012 — The tax credit will be $12,650 per child. Families who adopt children with special needs will be able to claim the full credit regardless of their qualified adoption expenses. Other adopters will have to have qualified adoption expenses.

The credit will NOT be refundable, meaning that families can benefit only if they have federal income tax liability. Just as before 2010, families will claim the credit with their 2012 taxes, use what they can that year, and then can carry any remaining credit forward for five additional years until the credit is used up or time runs out.

We strongly encourage everyone who is eligible to claim the credit even if they will not benefit in 2012. It is possible families’ tax situations will change in future years or that the credit might become refundable again.

2013 — Only families who adopt special needs children from foster care will be eligible for up to $6,000 in the adoption tax credit. However, the credit will be based on expenses so families would need to have qualified adoption expenses to claim any credit. The credit will not be refundable, so families can benefit only if they have federal income tax liability. The income limits for the credit will also be reduced significantly in 2013, meaning that families with higher incomes will not benefit.

The adoption credit was made permanent for special needs adoption when the credit was first created. Credits for other adoptions are time limited and are scheduled to end by December 31, 2012.

 Information taken from this article.