• March/April 2001
  • Vol. 2, No. 2

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Tax Season Assistance for Foster/Adoptive Parents and Kinship Caregivers

Gear up for tax season with new materials to share with resource families! The Casey National Center for Resource Family Support's website offers materials to help foster and adoptive parents and kinship caregivers claim the maximum tax benefits available to them. Since they are not considered legal advice, resource families are advised to consult with a professional tax advisor.

The items available online are:

  • A 17-page booklet summarizing various tax benefits, which agencies can edit by adding State-specific information and logos
  • A sample newsletter article, which can be modified and inserted in an agency's newsletter
  • Sample check stuffers, that can be sent in advance of the booklet or newsletter.

The general tax information explains eligibility for the following:

  • Earned Income Tax Credit, worth up to $3,888
  • Charitable deductions for unreimbursed, out of pocket expenses incurred in the care and support of a foster child
  • Adoption Tax Credit, worth up to $5,000 per child adopted, or $6,000 for the adoption of a "special needs" child
  • Dependency exemption for foster or adoptive children
  • Child Tax Credit, worth up to $500 for each dependent child under age 17
  • Child and Dependent Care Credit, for work-related child care of dependents
  • Education credits, worth up to $1,500 per year for college and some vocational education tuition.

Foster and adoptive parents and kinship caregivers should be aware that newly discovered tax benefits may be claimed retroactively for up to three years. Additionally, these resource families can obtain free assistance for tax preparation and disputes through the Volunteer Income Tax Assistance (VITA) programs and the Low Income Taxpayer Clinices (LITC).

Access Casey National Center's tax benefits material online at: http://www.casey.org/cnc/support_retention/federal_tax_benefits.htm. (This link is no longer available.)

Related Items

Visit the AARP Grandparent Information Center website for a fact sheet on tax tips for grandparents raising grandchildren (http://www.aarp.org/life/grandparents/helpraising/Articles/a2004-09-07-grandparents-taxtips.html).

The Secretary of the Treasury conducted a study of the effect the Small Business Job Protection Act of 1996 (PL 104-188) had on adoptions, which included tax provisions to assist families who adopt children--the Adoption Tax Credit and the exclusion of certain employer-paid or employer-reimbursed adoption expenses. Find the October 2000 Report to the Congress on Tax Benefits for Adoption online at: http://www.treas.gov/taxpolicy/library/adoption.pdf.

Order free IRS publications on tax benefits for adoption and foster care by calling 1-800-829-3676 or download from the IRS website at: http://www.irs.gov/formspubs/index.html.

The American Bar Association Section of Taxation maintains a website with a page that lists over 100 links to tax-related websites, including Federal and State agencies, and private organizations at: http://www.abanet.org/tax/sites/html.

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