Archives for August 2019

Tax Credits to Make Adoption More Affordable

Offsetting Legal Expenses With the Federal Adoption Tax Credit

About 2,000 adoptions are finalized in the state of Pennsylvania each year. The Federal Adoption Tax Credit often plays a significant role in such adoptions and was introduced to ensure that it was not only the wealthiest Americans who could afford to adopt. Representation from a PA adoption lawyer is often necessary and highly recommended, and the tax credit can offset those costs as well.

What Is the Federal Adoption Tax Credit?

Since being instituted in 1997, the Federal Adoption Tax Credit has been available to adopting parents across the U.S. There have been some changes each year, such as the amount available to claim and the income limits. In addition, the credit became refundable for 2010 and 2011 before reverting back to being nonrefundable for the following years. The credit covers expenses that occur before, during and after the adoption. Practically any expenditure directly tied to the adoption can be claimed. Some of the most common examples include:

  • Court costs
  • Legal expenses
  • Adoption agency fees
  • Traveling expenses, including food and lodging

There are some expenses that are explicitly excluded by the tax law, such as:

  • Surrogacy costs
  • Money spent for a step-parent
  • Expenses covered by an employer

Who Is Eligible?

Anyone who has expenses related to an adoption is eligible. Whether the adoption was ever finalized has no bearing on eligibility. Note that there are some income restrictions. If your income is greater than the first threshold, the tax credit available to you is reduced. If your income is greater than the second threshold, you are not qualified to claim the credit.

When the Credit May Be Claimed

Adoption-related expenses can be claimed on your tax return for the year following the period in which they were incurred. However, in the year you complete an adoption, you have the option of claiming those expenses on the tax return for that year. In addition, any expenses related to an international adoption cannot be claimed until those proceedings have been finalized.


Adoption Tax Credit Refundability Act

The American Taxpayer Relief Act of 2012 extended the credit perpetually but did not allow for the refundable status. There have been multiple attempts to push through an Adoption Tax Credit Refundability Act. The most recent such act as of this writing had been drawn up and introduced but not expected to be passed. The credit being refundable would mean that adopting parents could claim it even if they did not owe taxes. In other words, it would add to their return.

Carrying the Credit Forward

Although this particular tax credit is not refundable at the time of this writing, you can carry it forward. File any claims at the appropriate time as you normally would. Any credit that goes unused due to a lack of tax liability will be available to offset future liabilities for up to five years.

Other Tax Credits Relevant to Adoption

The Federal Adoption Tax Credit is not the only tax credit that affects adoptive parents. The Child Tax Credit is available to all parents, claimable on a per-child basis and partially refundable. If an adoptive parent will have childcare expenses once the adoption is finalized, then he or she is eligible for the Child and Dependent Care Credit. There is also the Earned Income Credit, which is aimed at lower incomes—as in around $50,000 or less—and is refundable.

The Adoption Assistance You Need

If you’re considering adopting or have already started the process, then we highly recommend seeking local representation from a PA adoption lawyer. It is never too early to seek the necessary legal counsel. At Cofsky & Zeidman, we focus on adoption in NJ and PA, and we’d welcome the chance to assist you. Schedule your consultation by contacting us online or by calling our Philadelphia office at 215-563-2150, our Haddonfield office at 856-429-5005 or our Woodbury office at 856-845-2555.

Minimizing Stress During the Adoption Process

Dealing with the Stress of the Adoption Process

Unfortunately, the child adoption process does not always go smoothly. There can be frustrating legal delays and long waiting periods. As parents-to-be, you must find ways to deal with stress so that you’re emotionally and physically ready when it is time for your child to move into your home.

Time and Patience

Stress is your body’s natural reaction to a threat. When your body is under stress, your blood pressure rises and your heart rate increases. Your body releases energy stored in fat to prepare your muscles for a fast response. This is your body’s response to any generalized threat. While it may be helpful if you’re dealing with a wild animal, the response is not so helpful when you’re dealing with an unexpected delay or a nervous day in court. If you’re engaging this response several times a day, it can have serious consequences to both your physical and mental health. The legal process surrounding adoption is complicated because the stakes are so high for the child involved. However, that doesn’t mean you should let yourself become consumed with stress.

High levels of chronic stress have been linked to depression, heart attack, stroke, weight gain and diabetes. Adoption stress can be troubling because you may be dealing with frequent moments of momentary stress as you go through the process.

Learn to Slow Down

The stress response is so fast that you often do not realize it’s happening until you’re in the middle of it. Thankfully, there are some simple ways that you can respond to stress. The easiest technique is controlling your breath. Much of the stress response is automatic and out of your control once it starts. You cannot control your heart rate, but you can control your breath rate. Taking a few slow, deep breaths can start to slow things down.

Deep breathing also gives you a way to slow down your mind. Most people under stress find that they develop tunnel-vision and are only able to handle the task at hand. This is not the best time to make important decisions as you’ll have trouble seeing all the angles. It can be a real problem when you are going through the adoption process. When you take those deep breaths, pay attention to the feeling of breathing, the way your chest rises and falls. By redirecting your attention from the issue that is giving you stress, you can go back to it from a better, calmer perspective.

Learn to Get Moving

Another way to deal with stress is to get moving. The stress response is all about preparing your body for action. In the stress response, your body releases several hormones to stimulate various physical changes. Exercise can help process these hormones and get them out of your system. Your body is preparing to move, so let it move.

On a day-to-day basis, regular exercise is an important part of dealing with the effects of stress. While you’re going through the adoption process, find an activity you enjoy and do it regularly. Take an exercise class. Go walking, jogging, biking or swimming. The important thing is to keep your body moving.

On court dates or meeting dates, you may want to find opportunities to take a walk. When there is a break in the proceedings, walk around the block. You will come back calmer and in a better frame of mind.

Work With a Partner

Coping with stress during adoption is much easier when you are working with a lawyer who specializes in the field. One of the causes of stress during adoption is not knowing what will happen next. An adoption lawyer can help you prepare for any bumps in the road.

After many years as an NJ adoption attorney, Donald Cofsky knows how stressful the adoption process can be for potential parents. Our law firm can guide you throughout the process and help provide you with peace of mind. If you are looking for an NJ adoption attorney, contact our Haddonfield office at 856-429-5005.