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  Claim the Canadian tax credit for adoption expenses
Family Helper editor

(Feb. 16, 2009)   Doing your income tax return for 2008? Remember to claim the tax credit if you adopted last year.

The credit could be worth up to $1,600 per adoption. That's not much of a break on the expense of an adoption, compared to Quebec's Adoption Tax Credit, as I pointed out in my previous article, "Adoption tax credit ... finally passed" (Feb. 23, 2005).

Nevertheless, you won't want to forget to make a claim. Here's how:

* Claim up to $10,643 in eligible expenses for any adoption finalized in 2008 (domestic or international) and get a credit of up to $1,600. (You subtract the credit from the tax you owe.) The claim goes on Line 313 of Schedule 1.

* Claim for expenses dating back to when you opened your adoption file with an agency (so it could cover expenses in 2007 and earlier) -- and be sure to have all receipts handy in case of an audit.

* If you forgot to claim for an adoption in 2005, 2006 or 2007, don't worry. You can still get a refund by asking for a reassessment. Just file a T1 Adjustment Request, Form T1-ADJ.

Here are details of the federal adoption expense tax credit.

The credit

Canadians who adopt may claim up to $10,643 in eligible expenses for any particular adoption. It's a 15% non-refundable credit. When calculating your tax payable, you get to deduct 15% of up to $10,643 in expenses during the "adoption period". The adoption period starts when you open an adoption file with your provincial ministry responsible for adoption, or with a licensed adoption agency. It ends when the adoption order is issued, or when the child starts living with you, if that is later.

"Non-refundable" means that if the credit takes you past the point of owing zero taxes, you wouldn't be refunded any excess. (And if the government owed you a tax refund, then the adoption tax credit wouldn't be worth anything to you.)

Eligible expenses

* Fees paid to an adoption agency licensed by a provincial or territorial government.
* Court costs; legal and administrative expenses.
* Reasonable travel and living expenses for child and adoptive parents.
* Document translation fees.
* Mandatory fees paid to a foreign institution.
* Mandatory expenses incurred for the immigration of the child.
* Other reasonable expenses required by a provincial or territorial government or an adoption agency.

Making your claim

You enter "Adoption Expenses" on line 313 of Schedule 1, "Federal Tax". What you can claim is listed on page 38 of the 2008 Tax Guide, and at "Are your expenses eligible?". For the time limit, see "Did your expenses happen during the adoption period?".

If you live in Newfoundland and Labrador, Ontario, Manitoba, Alberta, British Columbia or Yukon, be sure also to claim your adoption expenses on line 5833 of Form 428 (Provincial Tax).

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"From Family Helper,"



Fertility Adoption Adoption Resource Central Post-adoption Family Tree
Contact: Robin Hilborn,
Box 1353, Southampton, Ont. N0H 2L0 Canada
©2009 Robin R. Hilborn
Updated Feb. 16, 2009

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