In 2010 the Adoption Tax Credit now becomes a refundable credit. This is fantastic news for adoptive families.
This means families can now claim the credit in one lump sum on 2010 taxes even if their total tax liability is less than the adoption tax credit.
It gets even better. The change also applies retroactively to families who finalized their adoptions as far back as 2005 and who still have the adoption tax credit to carry forward.
The maximum adoption tax credit per child increases to $13,170 in 2010. Under the expanded benefits, the refundable tax credit allows families who owe no taxes to receive the funds from the government.
Disclaimer: Please consult with your tax preparer.