rp-10-35.pdf

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# Part III

Administrative, Procedural, and Miscellaneous

26 CFR 601.602. Tax forms and instructions.
(Also Part I, §§ 23, 36C, 137)

Rev. Proc. 2010-35

## SECTION 1. PURPOSE

This revenue procedure modifies and supersedes sections 3.03 and 3.14 of Rev.
Proc. 2009-50, 2009-45 I.R.B. 617, to reflect the statutory amendments by the Patient
Protection and Affordable Care Act, Pub. L. 111-148, 124 Stat. 119 (PPACA) to the
adoption credit under § 36C (formerly § 23) and the exclusion for adoption assistance
programs under § 137.

## SECTION 2. BACKGROUND

For taxable years beginning in 2010, §10909(a)(1) of PPACA increased the
maximum adoption credit and the maximum adoption assistance exclusion from
$12,170 to $13,170.

SECTION 3. MODIFICATION OF REV. PROC. 2009-50

To reflect the statutory amendments by PPACA to §§ 36C and 137, sections 3.03
and 3.14 of Rev. Proc. 2009-50 are modified to read as follows:

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.03 Adoption Credit. For taxable years beginning in 2010, under § 36C(a)(3) the
credit allowed for an adoption of a child with special needs is $13,170. For taxable
years beginning in 2010, under § 36C(b)(1) the maximum credit allowed for other
adoptions is the amount of qualified adoption expenses up to $13,170. The available
adoption credit begins to phase out under § 36C(b)(2)(A) for taxpayers with modified
adjusted gross income in excess of $182,520 and is completely phased out for
taxpayers with modified adjusted gross income of $222,520 or more. (See section 3.14
of this revenue procedure for the adjusted items relating to adoption assistance
programs.)

.14 Adoption Assistance Programs. For taxable years beginning in 2010, under
§ 137(a)(2) the amount that can be excluded from an employee's gross income for the
adoption of a child with special needs is $13,170. For taxable years beginning in 2010,
under § 137(b)(1) the maximum amount that can be excluded from an employee's gross
income for the amounts paid or expenses incurred by an employer for qualified adoption
expenses furnished pursuant to an adoption assistance program for other adoptions by
the employee is $13,170. The amount excludable from an employee's gross income
begins to phase out under § 137(b)(2)(A) for taxpayers with modified adjusted gross
income in excess of $182,520 and is completely phased out for taxpayers with modified
adjusted gross income of $222,520 or more. (See section 3.03 of this revenue
procedure for the adjusted items relating to the adoption credit.)
SECTION 4. EFFECT ON OTHER DOCUMENTS

Sections 3.03 and 3.14 of Rev. Proc. 2009-50 are modified and superseded
effective for taxable years beginning in 2010.

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# SECTION 5. DRAFTING INFORMATION

The principal author of this revenue procedure is Marilyn E. Brookens of the
Office of Associate Chief Counsel (Income Tax & Accounting). For further information
regarding this revenue procedure, contact Ms. Brookens at (202) 622-4920 (not a toll
free call.