Adoption Tax Credit


IRS Publication #8839: Qualified Adoption Expenses

Publication #8839 Instructions

Summary of state laws on finalization of international

Tax Credit FAQ

What is the Adoption Tax Credit?

The Adoption Tax Credit (ATC) helps defray adoption expenses for families adopting eligible children. The ATC helps make adoption possible for families who may otherwise be unable to afford to adopt.

Who qualifies for the Adoption Tax Credit?

Families may become eligible for the Adoption Tax Credit in the tax year that they finalize an adoption of an eligible child. There are limitations with regard to adjusted gross income (AGI) that determine if the credit can be taken in full, in part, or not at all. To determine if you qualify, visit or contact your tax accountant.

Do all adoptions qualify for the Adoption Tax Credit?

Special needs and non-special needs domestic adoptions, and finalized international adoptions qualify. For more information, visit

What is the maximum amount of the Adoption Tax Credit?

The maximum amount will vary from year to year. For adoptions finalized in 2011, the maximum adoption credit is $13,360 and the amount is refundable.

For adoptions finalized in 2012, the maximum adoption credit will be approximately $12,650 and the amount will be non-refundable.

What is the difference between a refundable credit and a non-refundable credit?

A non-refundable credit can reduce the amount of tax you owe (your tax liability) to zero but not below. A refundable credit can reduce your tax liability to zero and IRS pays back (refunds) any remaining credit to you in the same year. For example, if your tax liability is $10,000 and your credit is $12,000, with a refundable adoption credit, you would reduce your tax liability to zero and also receive a refund of the $2,000. With a non-refundable adoption credit you would reduce your tax liability to zero and carry the remaining $2,000 credit forward. IRS Publication 8839 provides a worksheet for calculating the credit carry forward.

What are 'qualified adoption expenses?'

According to the IRS: "Qualifying adoption expenses are reasonable and necessary adoption fees, court costs, attorney fees, traveling expenses (including meals & lodging) and other expenses related to, and whose principal purpose is for, the legal adoption of an eligible child."

Where can I get more information?

For more information on the Adoption Tax Credit, it is best to consult with a reliable licensed tax preparer. You should also consult the IRS website at and search "Adoption Tax Credit." For information on avoiding delays when filing the adoption tax credit, visit Creating a Family at

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