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10Aug, 15

The adoption tax credit is a wonderful resource for adoptive parents. If you qualify for the full adoption tax credit, it can give you up to $13,190 of tax benefits, per child, towards your adoption. The tax credit starts phasing out for families with modified adjusted gross incomes above $197,880 and the credit will go away completely for those with incomes around $237,880.

Who is Eligible for the Adoption Tax Credit?

The tax credit applies to all adoptions other than stepparent adoptions (i.e. international, domestic, private and public foster care.) The credit is a dollar for dollar reduction in the amount of federal taxes owed for that year. The tax credit can be carried forward and used for a total of six years.

In order to get the adoption tax credit, you must have qualified adoption expenses, which include:

  • adoption fees
  • attorney fees
  • court costs
  • travel expenses (including meals and lodging) while away from home
  • re-adoption expenses relating to the adoption of a foreign child

Although the adoption tax credit doesn’t help adoptive come up with cash up front, it does help with the total cost in the long run. This tax credit is a big help for families who do not have lower or moderate incomes but who also have not reached the ceilings of $197,880 to $237,880.

For more information about the adoption tax credit, see http://www.nacac.org/taxcredit/taxcredit.html.

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