| Beginning
Fiscal Year July 1, 2004, the law regarding
Adoption Tax Credits has changed. All tax
credits claimed after June 30, 2004, will
be paid on an apportioned basis rather than
on the first come, first served basis that
has been used in the past.  The
changes to the Adoption Tax Credit are included
in the Child Welfare Reform Bill, House
Bill 1453, signed by the Governor today.
The bill increases the total dollars available
for Adoption Tax Credit (ATC) purposes from
$2 million to $4 million. Initially $2 million
is allocated for Missouri resident special
needs children, and $2 million is for non-resident
special needs children. However, any portion
of the $2 million remaining unclaimed for
non-resident children after September 28,
2004, (first 90 days following July 1, 2004)
may be added to the $2 million available
for Missouri resident special needs children.
The revised ATC Claim form (MO-ATC) includes
questions that allow the Missouri Department
of Revenue (department) to determine if
a special needs child is a Missouri resident
child or a non-resident child.
If claims exceed the amount available for
either category (Missouri resident or non-resident
children), the total amount available will
be apportioned among all valid claims for
that category based on the amount of ATC
claimed on each valid return filed regardless
of the order received (total amount available
for category, divided by the amount of all
valid claims for that category, multiplied
by the amount claimed by each taxpayer).
This means the department must wait until
all claims are filed to determine the appropriate
apportionment. Therefore, notification of
the amount of each tax credit approved cannot
be made until June 2005.
To claim an ATC, an income tax return should
be filed after June 30, 2004. All claims
must include information attesting to the
residency of the special needs child at
the time the adoption was initiated. Form
MO-ATC has been revised to require this
information. If a Form MO-ATC has already
been completed, parents only need to complete
Part A of the revised form and include both
forms with the credit claim.
|
