Lesson: Adoption Credit

In this lesson, Nick Palazzolo, CPA, dives into the intricacies of the adoption credit, a non-refundable credit aimed at alleviating the expenses incurred from adopting a child. He lays out the types of qualifying adoption expenses that can be applied towards the credit, including adoption fees, court costs, and travel expenses, among others. Nick also clarifies the concept of credit carryforward, explaining how any unused portion can continue to reduce tax liabilities for up to five years. Additionally, he explores the phase-out range that applies to the adoption credit, highlighting its decreasing benefit to taxpayers as their income rises. With illustrative examples, Nick ensures that navigating through the adoption credit and its implications on tax liabilities becomes a smoother process.