Thursday, December 15, 2011

Adoption Credits for Same-Sex Couples

From the New York Times:

Since the federal government does not recognize same-sex marriage, such couples are viewed as strangers in many spheres of their financial lives. They need to file separate federal tax returns, for instance.  And sometimes, that can come with certain advantages.

Take the adoption tax credit.  If you adopt your spouse’s child, you cannot claim the credit. But since same-sex married couples are not considered spouses under federal law, they are permitted to use the credit — at least until their unions are recognized.

So when several lesbians seeking to adopt a partner’s child received letters from the Internal Revenue Service that said they could not use the credit, they couldn’t help but wonder: Is the government choosing to recognize our unions only when it’s to the government’s benefit?

As it turns out, the I.R.S. keeps close tabs on many refundable credits: The adoption credit is refundable in 2010 and 2011, which means that the credit reduces the amount of tax you owe, dollar for dollar. And if the amount of the credit exceeds your tax bill, you get to collect that extra cash. Because it’s such an enticing break, it’s also ripe for abuse.

As a result, the I.R.S. conducted more audits by mail last year, and required many couples — gay and heterosexual — to provide more documentation. (In fact, 68 percent of the nearly 100,000 returns on which taxpayers claimed the adoption credit were audited by mail, according to a report by the Government Accountability Office, which reviewed the I.R.S.’s strategy to ensure taxpayers were rightfully claiming the credit.)

Read more here.

MR

http://lawprofessors.typepad.com/family_law/2011/12/adoption-credits-for-same-sex-couples.html

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Comments

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Posted by: Family Law | Dec 16, 2011 1:44:37 PM

Very informative article, thanks for posting this. For any adoptive parents looking for advice on raising an adoptive child, I would recommend the following link. I found it very helpful: http://www.onlineceucredit.com/ceus-online/cpa-adoptive-parent/continuing-education.html

Posted by: Karen George | Dec 20, 2011 12:09:59 PM

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