Ohio Bankruptcy Law and Special Needs Adoption Credit

We talk a lot here about financial preparation preadoption and postadoption, so I thought this was an interesting ruling from Ohio.

“A bankruptcy trustee was not entitled to turnover of a debtor’s tax refund that was attributable to the special needs adoption tax credit of Code Sec. 36C . The adoption tax credit was a refundable credit for the tax year at issue; therefore, she had a “right to receive” the adoption tax credit. Moreover, the funds were reasonably necessary for the support of the debtor and her dependent children. The debtor testified that she was single with six dependent children, two of which required medical and psychiatric care. Moreover, she testified to postpetition increases in her expenses that left her with no disposable income. Therefore, the refund was exempt under state (Ohio) law.”

Turnover of Refund Attributable to Special Needs Adoption Tax Credit Denied (In re Smith, BC-DC Ohio)

[CCH Group.com 1/8/13]

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