There are many things to consider surrounding the adoption of a child. While those initial, happy first steps may have nothing to do with your taxes, there are some aspects of the adoption process that you might consider when tax time rolls around.
If you adopt a child that needs or has needed medical treatments in the past, you might be able to claim a deduction for certain medical expenses. If that child was ineligible for Medicaid to cover their expenses, and then you made payments for those medical bills, you may be eligible to claim those fees as a deduction on your taxes.
However, there are some restrictions and regulations when it comes to these types of deductions, so here’s a brief look at some of the finer print:
- The adoptive parents must be able to claim the child as a dependent. They must have been a dependent during their medical care or during the repayment period.
- These medical expenses should be claimed as part of other adoption expense deductions, such as legal fees and adoption agency fees.
- Expenses that are reimbursed by the adoption agency are not eligible.
There are a few instances where you won’t be able to claim medical expenses, including but not limited to:
- The adoption of a spouse’s child
- If the expenses are related to the birth mother’s childbirth or medical care.
If you are having a difficult time navigating taxes after the adoption of a child, especially one with medical needs, give Taxation Solutions, Inc. a call today. We are more than happy to help!