October 12th, 2022 

TOPIC: Adoption Tax Credit


This guide will educate you on the adoption tax credit and how to qualify for it. 

If you are considering adopting a child, this guide can help make the adoption process more affordable. 

If you like guides like this, feel free to follow us on social media and subscribe to our email list to get updates on when a new blog drops!


What is Adoption Tax Credit?


The government loves when its citizens find ways to contribute and give back to society. 

One of the best ways you can contribute to society is by adopting a child who needs support. 


In 2020 the number of kids in foster care was estimated to be 407,000.

That means hundreds of thousands of kids still need a place to call home. 


Suppose you’re willing to take on the responsibilities of being a parent or guardian who can provide a home for a child.

Then the government is willing to reimburse you for the cost associated with the adoption process.


This money reimbursement is what we refer to as an adoption tax credit. 

It’s basically the government saying thank you for giving a child a place to call home. 


How Do I Qualify For The Credit? 


As with most tax credits the government offers, there are limits to who can qualify for this credit based on their annual income. 

Anyone making more than 256,660 will not be eligible for adoption credit. 


Anyone who makes between $216,660 and $256,660 can still receive some credit. 

However, the amount of credit back will start to decrease as you get closer to the $256,660 income limit.


Typically the child must be under the age of 18 to be adopted. 

However, suppose the child is unable to take care of themselves. In that case, you could still be eligible to receive this credit. 


Note: If you’re adopting your spouse’s child, you will not be eligible for this credit.  


How Much Money Can I Receive From This Credit? 


You can receive up to $14,440 tax credit for the expenses associated with the adoption process. 

This 14,440 tax credit applies to the whole adoption effort. 


So if it takes you 3 years to adopt a child, the government will cover all your expenses for those past 3 years.

However, that is until you reach that $14,440 limit.

This credit only applies to what the government considers to be eligible expenses. 


What Expenses Are Refundable?


Here’s a list of the expenses that the government will refund you for when adopting a child: 


  • Attorney fees and court cost
  • Fees to adoption agencies 
  • Travel expenses 
  • Meal expenses
  • Other expenses that are directly related to the adoption of the child


Can I Adopt a Child From a Foreign Country? 


Fortunately, the government offers adoption credit to parents even if the child’s place of birth is outside of America. 

However, the government is a little more strict on when you can receive the adoption credit. 


Say you begin the adoption process for a child born in the U.S. 

If that’s the case, you can still be refunded on expenses incurred before the adoption became final. 

However, when it comes to foreign children, the government will only refund you for expenses after the adoption process has concluded. 


How Can I Claim This Credit? 


To claim this credit, you will need to fill out form 8839

It is recommended that you attach the 8839 form to your form 1040, but you no longer have to do so if you don’t want to. 


If you decide not to attach your 8839 form to your 1040 form, then it is recommended that you keep the documentation as part of your records. 

You can e-file form 8839 with your regular tax return.


Want to learn more about taxes?


We created a blog explaining the difference between tax deductions and tax credits. 

If you haven’t read that blog, click the link below to dig in! 

Click Here