lgbt indy law info center



Adoption Tax Credit Advice for Lesbian, Gay, Bi-Sexual, and Transgender Families

Many potential adoptive parents find that adopting a child puts a big strain on family finances. While same-sex couples are excluded from many tax benefits, there is one instance that they qualify for tax breaks while opposite-sex married couples don’t – if they adopt a partner’s child.

The Federal Adoption Tax Credit became permanent in 2013, allowing for a maximum adoption tax credit of $12,970. The tax credit is non-refundable, meaning that only those who owe taxes are allowed to claim it. It is based on modified adjusted gross income, and is recalculated each year.








Who Qualifies?

A second-parent adoption allows a same-sex partner to adopt his or her partner’s biological or adopted child without terminating the first parent’s legal status, and Federal Adoption Tax Credit grants qualifying taxpayers up to $12,650 per child for certain expenses, which include legal fees, court costs, and the charges associated with a home study.

Opposite sex couples who are married can claim the federal tax credit when they adopt a child together, but they don’t qualify when one spouse adopts the child of his or her spouse. But same-sex couples in Indiana can qualify for the Adoption Tax Credit for the expenses of their second parent adoption as long as they have not married in another state. However, now that the IRS is recognizing same-sex marriages, same-sex married couples will no longer be able to qualify for the adoption tax credit when adopting their partner’s/spouse’s child, even though Indiana does not currently recognize their same-sex marriage.

What Expenses Qualify?

Qualifying adoption expenses include reasonable and customary adoption fees accrued in a domestic, international, or foster care adoption. Surrogacy or stepparent adoptions (i.e., adoption of a legal spouse’s child) do not qualify for the credit. If you live in a state that offers an adoption tax credit, you may receive credit for additional expenses as well; however, Indiana is one of seven states that offer no state income tax relief for adoption. If you have questions regarding adoption tax credits and whether or not you qualify, Indiana Adoption Tax Credit Attorney Barbara J. Baird can offer guidance.

Considering adopting a baby or young child and need tax advice? Contact the law office of Barbara J. Baird, an Indianapolis attorney who specializes in helping the gay and lesbian communities of central Indiana with their adoption and family law issues. Call 317-248-5120 for a free case evaluation at her Indianapolis office.


Same Sex Marriage Planning

We are Married, Now What?

Why my Wife Needs to Adopt Our Baby

Domestic Partnership

LGBT Adoption

Adoption Tax Credit

Co-parent/Second-parent Adoption

Recent Supreme Court Rulings

Domestic and International Adoption

LGBT Elder Law

LGBT Guardianship

LGBT Gift Pitfalls

LLC Formation for LGBT Owned Businesses

Planning Long-Term Care

Probate and Trust Administration

Property Transfer - TOD Deed

Transgender Changes

Wills, Trusts and Estate Planning

Advance Directive

IRS Rulings on Same Sex Marriage

Social Security and Same Sex Marriage - Pitfalls and Potential