Good news for those who are adopting or finalizing an adoption in 2007:

The Federal Adoption Tax Credit limit is being increased to $11,390 for a child with special needs and the maximum credit allowed for other types of adoptions has also been raised to $11,390.

You can exclude this tax credit from your gross income for qualifed adoption expenses paid or incurred by your employer under a qualified adoption assistance program in connection with your adoption of an eligible child.

The credit begins to phase out if you have modified adjusted gross income of $170,820 or more and is completely phased out if you have modified adjusted gross income of $210,820 or more.

Source:
Internal Revenue Service: http://tinyurl.com/yex73f

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