If you have adopted a child, you can claim a credit upto 50% of the adoption cost. You can claim this credit on your California State tax return (Form 540, Form 540 NR(long or short)) with credit code 197.
Your allowable credit is $2500 per childern and you can carry over the excess credit to future years.
There are certain rules to claim this credit on your california return and they are as below.
- In the custody of a California public agency or a California political subdivision.
- Fees for Department of Social Services or a licensed adoption agency.
- Medical expenses not reimbursed by insurance.
- Travel expenses for the adoptive family.
- Any deduction for the expenses used to claim this credit must be reduced by the amount of the child adoption costs credit claimed.
1. Enter qualifying costs for the child . . . . . . . . . 1 _______
All the information are taken from California Government Website(http://ftb.ca.gov/). Please refer the instruction before claiming this credit on your state tax return.