The value of the adoption tax credit has been enhanced for 2010, one of the many tax-related provisions that was part of the massive health care reform bill that was signed into law in March 2010. The adoption credit is worth a maximum of $13,170 for 2010 and will be a refundable credit.

Refundable credits can produce tax refunds that exceed the amount of money paid in through withholding and estimated taxes. Non-refundable credits, by contrast, can at most reduce a person’s federal income tax liability to zero.

The adoption credit will remain a refundable credit for 2011 as well, and the 2011 maximum dollar amount will be indexed for inflation. After 2011, the credit will revert back to being worth $5,000 (or $6,000 for a special needs child) under the law’s sunset provisions.

Article found on about.com. http://taxes.about.com/b/2010/06/21/adoption-credit-expanded-for-2010.htm?nl=1