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December 22, 2004
The IRS has just released a revised version of Publication
968 for use in preparing 2004 tax returns. Publication
968 explains two tax benefits available to offset the expenses
of adopting a child. First, individuals can claim an adoption
tax credit for certain expenses under Code Section 23. Second,
benefits provided under an employer's adoption assistance
program are excludable from employees' income if the program
complies with Code Section 137. Such benefits may be paid
by the employer directly or by employees with salary reduction
dollars under a cafeteria plan.
The 2004 version of Publication 968 is very similar to the
2003 version. The only change noted in the "What's New"
section is that the maximum credit and exclusion amounts have
increased to $10,390 for 2004 (from $10,160 in 2003). The
new version also notes that for 2004, the credit and exclusion
will begin to be phased out for individuals with modified
adjusted gross income greater than $155,860 and are unavailable
for individuals with modified adjusted gross income of $195,860
or more.
Direct link to the PDF version of the IRS Publication 968
for 2004 is available here.
Source: EBIA.
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