710:50-15-118 Credit for nonrecurring adoption expenses

(a) General provisions. In taxable years beginning after December 31, 2022, an income tax credit is allowed to resident individual taxpayers for nonrecurring adoption expenses, paid in connection with the adoption of a minor, or proposed adoption of a minor which did not result in a decreed adoption. (1) For tax years 2023 through 2025, the amount of the credit is 10% of the qualified expenses but cannot exceed $2,000 per calendar year ($4,000 if married filing joint return). (2) For taxable years beginning on or after January 1, 2026, the amount of the credit is 15% of the qualified expenses but cannot exceed $3,000 per calendar year ($6,000 if married filing joint return). (b) Allowable expenses. For purposes of this Section "nonrecurring adoption expenses" means and includes: (1) Adoption fees; (2) Court costs; (3) Medical expenses; (4) Attorney fees; (5) Expenses directly related to the legal process of the adoption of a child and are not reimbursed by other sources, to include, but not limited to costs related to: (A) The adoption study; (B) Health and psychological examinations; (C) Transportation and reasonable costs of food and lodging for the child or adoptive parents which are incurred to complete the adoption process. Transportation expense by either commercial or private means may be claimed based upon actual unreimbursed costs incurred, or in the case of travel by private means, the mileage rate allowed pursuant to the Internal Revenue Code for determining business travel expense may be elected. (6) Costs associated with physical remodeling, renovation, or alteration of the adoptive parents' home or property, if incurred in conjunction with the adoption of a special needs child, as authorized by the court. (c) "Nonrecurring adoption expenses" shall not mean or include: (1) Costs reimbursed by other sources. (2) Attorney fees incurred from and after the commencement of an action involving a contest of an adoption. (3) Costs associated with physical remodeling, renovation, or alteration of the adoptive parent's home or property, with the exception noted in (b)(6) of this Section. (d) Verification. A schedule describing the expenses claimed must be enclosed and filed with the claimant's tax return. Receipts supporting the claimed expenses are not required to be submitted with the tax return and descriptive schedule but must be retained and be available upon request by the Tax Commission.