The Process:
Adoption and tax return

    The adoption of your child costed you at least around $10 000, maybe more than $20 000. You financed the adoption the best you could with the help of your family, your bank or you simply by thightening your budget to gather the funds needed to realize your dream.

Now, there is one good news: the Québec's government entitles you to a tax credit. A bad news: the federal don't. But a national campaign is under way to support a private Bill that would create a tax credit at the federal level.

The provincial tax credit

Basically, the tax credit works like this: in the year you get your adoption Court Order or the recognition of the foreign judgment (depending on the country), you may ask, for each children, for a tax credit equals to 30% of your adoption expenses up to a maximum of $6 000 in 2002, (25% - $3 750 in 2000, 20% - 3 000$ in 1999, 20% - 2 000$ in 1998).

To obtain this tax credit, you must present the TP-1029.8.63 form (Calculation of the refundable tax credit for adoption expenses) with your tax return. Here are the general conditions that you must respect to be eligible to the tax credit, as mentioned in this form:

"The individual may claim the tax credit for the year in which one of the following events occurred:

  • An adoption order, establishing a bond of filiation between the individual and a child, was handed down by a court having jurisdiction in Québec.
  • An adoption order handed down outside Québec received legal recognition in Québec.
  • The clerk of the Court of Québec issued to the individual a certificate attesting to the registration of the adoption of a child domiciled in the People's Republic of China.
As well, the individual must have been resident in Québec on December 31 of the year in which the event occurred. Iln the case of a deceased individual, he or she must have been resident in Québec on the date of death.)"

Adoption expenses giving entitlement to a tax credit are expenses paid by you or your spouse after the opening of the adoption file by the Minister of Health and Social Services or a certified agency. However, these expenses must be reasonable and must not have been claimed in your or your spouse's income tax return, for the year in question or a previous year, as a tax credit respecting medical expenses. As well, neither you nor your spouse may claim a tax credit regarding expenses for which you were reimbursed or are entitled to a reimbursement, unless the amount of the reimbursement was included in your income or that of your spouse and cannot be deducted elsewhere.

Attach this form to your income tax return, and be sure to enclose a copy of the adoption order lor, where the order was not remitted to you, the letter from the Ministère de la Justice attesting that an adoption order was handed down), the legal recognition in Québec of an adoption order handed down outside Québec, or the certificate attesting to the registration of the adoption. If you adopted more than bne child, you must complete a form respecting each child. Furthermore, if the other adoptive parent is also claiming a tax credit, the other parent must complete a separate copy of form TP-1029.8.63 and enclose it with his or her return.

Details of the applicable rules are given in the adjacent table. The last line of the first paragraph means that, of course, you can't ask for a tax credit if you have been reimbursed by a third party. There was such a case where parents had received money from their church so some of their adoption expenses where already paid for.

Note that you may have asked for a tax credit for medical expenses in a previous year but these expenses must be excluded in the TP-1029 form. Note also that you can split the tax credit between the two parents but the maximum stays the same (20% up to $3 000 by children).

The type of expenses you may include in the calculation of the tax credit are the following (as written in the form):

  • "Judicial or extrajudicial expenses incurred to obtain an adoption order in Québec, legal recognition in Québec of an adoption order handed down outside Québec, or a certificate anesting to the registration of the adoption of a child domiciled in the People's Republic of China.
  • Travel expenses of the child and of an escort, if the adoptive parents did not accompany the child.
  • Travel expenses of the child; travel and living expenses of the adoptive parents, if the adoptive parents were required to go to a foreign country to bring back the child.
  • Fees for translating documents related to the adoption.
  • Fees charged by an agency certified by the Minister of Health and Social Services
  • Fees charged by the foreign institution that took care of the child
  • Expenses related to the psychosocial assessment of the adoptive parents."
You may download the TP-1029.8.63 form which was valid for fiscal year1998. Haut de la page

The federal

Sorry, at the federal level there is no tax credit for adoption expenses. So why talk about that in this page? First to inform you about that fact. But also to tell you that a campaign is under way to ask for such a tax credit (and get something similar in other provinces).

A private Bill project was presented a few years ago by Eric Lowther, Deputee of Calgary Center. Bill C-505 propose a tax deduction of a maximum of $7 000 for adoption expenses. The Bill was presented under aother number after the last elections, still without success.

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