A Tax Benefit for Adoptions
August 22, 2018 § Leave a comment
For those of you who handle adoptions, there is good news you can pass on to your client(s):
HB 1566, effective January 1, 2018. increases the income tax credit for adoption expenses from $2,500.00 for each dependent child legally adopted to $5,000.00 for each child legally adopted. An income tax credit is also allowed in the amount of $5,000.00 for each child legally adopted through the Mississippi Department of Child Protection Services.
A taxpayer may claim only one of these credits for each child adopted. The carry forward under current law for the adoption expense credit is three years. The carry forward is increased to five years for the adoption care credit and is five years for the credit for an adoption through the Mississippi Department of Child Protection Services. The credits are repealed effective January 1, 2020.
This is an advantageous benefit since a credit reduces taxes dollar-for-dollar.
The bill was not signed until April, but the January effective date means that it is available for 2018 filings.