The IRS allows adoptive parents to deduct the expenses of their adoption. For 2024 — the taxes you’ll file n April of 2025 –the total refundable amount is $16,810.The federal adoption tax credit for the 2025 tax year (filed in 2026) tops out at $17,280. The credit amount is adjusted for inflation each year.
This is a non-refundable tax credit. That means that if you owe $15,000 in taxes and you spent $16,000, the adoption tax credit can reduce your tax bill to $0. However, you will not receive that additional $1,000. You can carry it over into future years, though.
For the 2025 tax year, the credit begins to phase out when your adjusted gross income hits $259,190 and phases out completely at $299,190 or above.
Bear in mind that stepparent adoptions are not eligible for this tax credit.
Which expenses are eligible?
Court costs and attorney fees are eligible. Travel costs when travel is required, including meals and lodging, are also eligible. You can also deduct other expenses directly related to the adoption process, such as the fee for a home study.
Birth mother expenses are usually not eligible.
You can claim the credit for the tax year during which you spent the money for the eligible expenses, or after the adoption is finalized. You may for example pay for the home study in one year and for the court costs the following year, depending on the timing of your adoption journey.
How to receive the adoption tax credit
You will need to file IRS Form 8839. This form requires information about the child, your income, your qualified expenses, and some mathematical calculations, Your accountant or tax preparer can help you if you need support with this form, but it is fairly straightforward.
The key is to keep good records of your expenses. If you have records of your qualified expenses showing what you paid to whom, you should not have trouble filing.
For help with your adoption tax credit, see your tax professional. For help and support with all the other aspects of your adoption journey, Heimer Law can help. We are an Arkansas family law firm specializing in adoptions.
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