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Reimbursements, tax credits assist military families in adoption process

National Adoption Awareness Month is observed every November to direct attention to the tens of thousands of children in the United States who await a permanent, loving family.

National Adoption Awareness Month is observed every November to direct attention to the tens of thousands of children in the United States who await a permanent, loving family.

JOINT BASE SAN ANTONIO-RANDOLPH, Texas -- National Adoption Awareness Month is observed every November to direct attention to the tens of thousands of children in the United States who await a permanent, loving family.

Although adopting a child is a rewarding and joyful experience, the adoption process itself can be challenging in a number of ways, especially for military members, who face realities such as deployments and permanent changes of station to overseas locations.

One of those realities is adoption’s financial burden: adoption fees and expenses that can add up to thousands of dollars.

Fortunately for military members, an adoption expense reimbursement of up to $2,000 per child can lighten that burden. In addition, like all taxpayers, they may claim a tax credit of up to $13,460 per child for qualified adoption expenses.

“The adoption expense reimbursement is a big advantage for military members,” said Pete Myers, 502nd Security Forces and Logistics Support Group Judge Advocate senior civil law attorney. “They may be able to claim up to $2,000 per child for qualifying adoption expenses.”

A publication of the Air Force Judge Advocate General’s School at Maxwell Air Force Base, Ala., “The Military Commander and the Law,” outlines the adoption expense reimbursement procedure, Myers said.

The procedure involves the military member contacting the local military personnel flight for guidance and copies of the application form, Department of Defense Form 2675, and providing required documentation; the unit commander’s certification of the claim’s validity; and the MPF’s forwarding of the member’s package to the Defense Finance and Accounting Service for review, decision and payment.

The adoption expense reimbursement also has time limitations.

Members must be on active duty when the adoption becomes final and must also be on active duty and have served at least 180 consecutive days on active duty when they file a claim. They also must file no later than one year after the adoption is final or one year after the child’s U.S. citizenship in a foreign adoption.

The tax credit of up to $13,400 for qualified expenses paid to adopt an eligible child also benefits adoptive military parents.

“However, if the adoptive parents’ modified adjusted gross income is more than $201,010, the credit is reduced,” said LaMarr Queen, 502nd SFLSG JA senior civil law paralegal and JBSA-Randolph tax program coordinator. “If their modified adjusted gross income is $241,010 or more, they can’t take the credit.”

The credit may be allowed for the adoption of a child with special needs even if the adoptive parents do not have any qualified expenses, Queen said.

“Qualified adoption expenses are reasonable and necessary expenses directly related to and whose principal purpose is for the legal adoption of an eligible child,” he said. “These expenses include adoption fees, court costs, attorney fees, travel expenses while away from home and re-adoption expenses to adopt a foreign child.”

Queen defined an eligible child as any individual under 18 years old or one who is physically or mentally incapable of caring for himself or herself.

He also noted the adoption credit is a nonrefundable credit that is applied directly to the taxes the person owes.

“Once your tax goes to zero, the remainder of the credit goes away,” Queen said. “However, in some cases, part of the credit may carry over to the next tax year and the credit will be applied to the next year’s return.”

Military members are also reminded their adopted children are eligible for TRICARE benefits, Myers said.

“As soon as the adoption is complete, the child is immediately eligible for health care,” he said. “The military member has 60 days to register the child into the Defense Enrollment Eligibility Report System. During that period, the child is entitled to health care.”

In addition, service members are eligible for 21 days of permissive temporary duty in connection with the adoption, Myers said.