NEW INCRECED CREDITS

Child's Investment Income
 
2010
Increase in age of children whose investment income is taxed at parent's rate. The rules regarding the age of a child whose investment income may be taxed at the parent's tax rate have changed for 2010. These rules continue to apply to a child under age 18 at the end of the year but, beginning in 2010, will also apply in certain cases to a child who either:
Was age 18 at the end of 2010 and did not have earned income that was more than half of the child's support, or Was a full-time student over age 18 and under age 24 at the end of 2010 and did not have earned income that was more than half of the child's support.

A student is a child who during any part of 5 calendar months of the year was enrolled as a full-time student at a school, or took a full-time, on-farm training course given by a school or a state, county, or local government agency. A school includes a technical, trade, or mechanical school. It does not include an on-the-job training course, correspondence school, or school offering courses only through the Internet.
Form 8615 is used to figure the child's tax. These rules also apply to parents who elect on Form 8814 to report their child's income on the parents' return.

Increase in investment income amount. The amount of taxable investment income these children can have without it being subject to tax at the parent's rate has increased to $1,800 for 2010.

2010
The amount of taxable investment income a child can have without it being subject to tax at the parent's rate has increased to $1,900 for 2010.
 Expansion of Adoption Credit
 
2010
For 2010, the adoption credit is refundable, meaning that you may claim it even if you owe no tax. The maximum adoption credit has increased to $13,170. Also, the maximum exclusion from income for benefits under your employer's adoption assistance program has increased to $13,170. 
These amounts are phased out if your modified AGI is between $182,520 and $222,520.  You cannot claim the credit or exclusion if your modified AGI is $222,520 or more. 
See Form 8839, Qualified Adoption Credit, and the Instructions for Form 8839 for more information.