Canada Promotes Expanded Adoption Tax Credit

“More adoption-related expenses will be made eligible for the Adoption Expense Tax Credit, under reforms introduced by the Canadian Government.

Promoting the changes, Ted Menzies, Minister of State (Finance), said: “Canadians who have children deserve our Government’s full support, particularly when it comes to recognizing some of the additional costs borne by adoptive parents.”

Adoptive parents can currently apply for a 15 percent non-refundable tax credit for expenses relating to the completed adoption of a child under the age of 18. Eligible expenses include adoption agency fees, immigration fees, document translation fees, court and legal expenses, mandatory fees paid to a foreign institution, and travel and living expenses for the child and adoptive parents. A maximum of CAD11,669 (USD11,305) can be claimed in expenses, per child, in 2013.

The credit currently applies to expenses incurred between the time that a child is matched with his or her adoptive family and the time that the child begins to permanently reside with the family. However, the Government says that adoptive parents may still face significant adoption-related expenses prior to being matched with a child.

The proposed reforms will mean that fees for provincially-required home studies and mandatory adoption courses are included among the costs that parents can claim for. In addition, the adoption period will be considered to have began either at the time that an adoptive parent applies for registration with a provincial ministry responsible for adoption or with an adoption agency licensed by a provincial government, or at the time that an adoption-related application is made to a Canadian court, whichever is earlier.

The new regime will apply to adoptions finalized after 2012.

It is estimated that 2,000 children are adopted from within Canada every year, while a further 30,000 remain in the care of child welfare agencies.

Laura Eggertson, President of the Adoption Council of Canada, praised the initiative: “We welcome any initiative that helps families adopt, particularly from foster care, and we think the tax credit changes are the first step to helping more Canadians build their families through adoption.””

Canada Promotes Expanded Adoption Tax Credit

[Tax News 6/10/13 by Mike Godfrey]

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