Adoption Tax Credit Info

The Basics of the Adoption Tax Credit

How much is the adoption tax credit for, and who qualifies?

The Adoption Tax Credit is now $13,400! Parents whose adjusted gross income is under $201,010 will qualify for the entire $13,400. Parents whose incomes are between $201,010 and $241,010 will qualify for a partial credit that is prorated. If you earn over $241,010, you are in the upper income bracket in the United States and do not qualify for the credit. While most adoptive parents will still find they have to pay substantial sums of money prior to the adoption, once completed, the credit should relieve some of the financial burden for most parents!

What should I do to document that I qualify for this tax credit?

It is important that adoptive parents get and keep receipts for all legitimate adoption expenses. If it is a domestic, non-special needs adoption, the credit is taken in the year after the expenses are pad. There is normally a one year lag rule. Legitimate adoption expenses would include, but are not limited to: Everlasting Adoptions’ fee, attorney fees, agency fees, consultation fees, and legitimate birthparent expenses.

What is the difference between a credit and a deduction?

A credit is an amount that can be deducted directly from the taxes that you owe. It means you can get reimbursed dollar for dollar, unlike a deduction, provided you qualify for the credit.

What if the adoption never finalizes?

Adoptive parents can take the credit even if the adoption does not finalize in a domestic adoption.

Is the adoption tax credit the same as the child tax credit?

No. This credit is separate and in addition to the child tax credit.

Qualifying expenses

Qualifying adoption expenses are reasonable and necessary adoption fees, court costs, attorney fees, traveling expenses (including amounts spent for meals and lodging) while away from home, and other expenses directly related to, and whose principal purpose is for, the legal adoption of an eligible child.

Non-qualifying expenses

Qualifying adoption expenses do not include expenses:

  • That violate state or federal law,
  • For carrying out any surrogate parenting arrangement,
  • For the adoption of your spouse’s child,
  • Paid using funds received from any federal, state, or local program,
  • Allowed as a credit or deduction under any other federal income tax rule, or
  • Paid or reimbursed by your employer or otherwise (except that amounts paid or reimbursed under an adoption assistance program may be qualifying expenses for the exclusion).

** Please remember to contact your tax specialist to see if you qualify for the Adoption Tax Credit. IRS Tax Credit Information:

***The Adoption Tax Credit is $13,400. Most of Everlasting Adoptions’ families are able to benefit from this tax credit, which covers Everlasting Adoptions’ fee and the home study fee!