(This story was distributed by Michigan News Connection to commercial radio stations throughout the state.)

(03/22/12) LANSING, Mich. - When the Affordable Care Act became law, it didn't just affect health care; it also changed what adoptive parents can claim on their taxes. Namely, the tax credit for adoption-related expenses went from being nonrefundable to refundable.

Accountant Jeremy Rospierski with Lutheran Social Services of Michigan is a tax preparer and an adoptive parent. He says that in the past, that meant the credit could only be used to offset any taxes you owed, with any extra rolled into the following year. But now, he says, the change means adoptive parents will get cash back - even if they don't owe anything.

"A refundable credit means that you can get the entire credit in the year that you file your Adoption Credit."

Under U.S. tax law, qualified expenses include adoption fees, court costs, attorney fees and travel expenses. Rospierski says that unused credits from the past five years can be carried forward, so parents who did not receive the full credit in the past can file an amendment for expenses going back to 2005.

The maximum amount adoptive parents can claim per child for 2011 is $13,360. Rospierski says parents who have adopted a special needs child are eligible to claim the maximum credit. He stresses that the definition of "special needs" is broader than many parents might be aware and is based on three criteria.

"One, the child is a U.S. citizen. The second qualification is that it's determined that the child will not return to the parents' home, which if you're adopted that's going to be the case. Number three is the state determines that the child will not be adopted unless assistance is provided for that child."

Rospierski says the tax return must also include a copy of the state's determination of special needs.

While Tax Day is typically April 15, this year the deadline for filing federal tax returns is Tuesday, April 17.

If you would like to support a charitable organization such as Lutheran Social Services of Michigan, and you are age 70½ or older, you may be able to make a tax-favorable gift for 2010 from your IRA if you complete the gift by January 31, 2011. The charitable IRA rollover allows individuals aged 70½ and older to make tax-free gifts of up to $100,000 now to qualified charitable organizations such as Lutheran Social Services, using funds transferred directly from an IRA. If you act by January 31, 2011, your gift can be used as a tax benefit for your 2011 taxes. You may make a second contribution from your IRA for 2011 any time before December 31, 2011.

Things to consider:
• This legislation is only for donors who are age 70½ or older.
• You will make a simple, one-step distribution from your IRA to Lutheran Social Services of Michigan.
• Charitable IRA distributions are limited to a total of $100,000 for 2010 and $100,000 for 2011.
• Your taxable income is not affected, because no taxes are due on the distribution.
• You can make an IRA gift for 2010 through January 31, 2011.
• You can receive this benefit even if you do not itemize your tax deductions.
• The transfer may count against your unsatisfied required minimum distribution.

Lutheran Social Services of Michigan recommends that anyone considering a gift seek advice from a financial or legal advisor to evaluate their personal circumstances, needs and wishes.

For more information about giving to Lutheran Social Services of Michigan, contact:
Jennifer Richard:  (248) 763 -7914 or jrich@lssm.org
Doug Lachniet: (616) 44309761 or dlach@lssm.org