With tax season upon us, one tax savings provision that people may not be familiar with is the adoption tax credit. If you adopted a qualified child in the year of 2024, there are certain qualified expenses that can be written off your taxes.
What does “qualified child” mean?
- A qualified child is a child who is either under the age of 18 or unable to care for themselves physically or mentally.
What are “qualified expenses”?
- Some of these expenses include adoption fees, attorneys’ fees, and travel expenses directly related to the adoption.
- An experienced tax attorney or adoption attorney can assist you by going through your adoption-related expenses with you to determine what expenses are “qualified.”
How much credit can I claim?
- For the 2024 tax year, you can claim up to $16,810 from the federal adoption credit.
Who is eligible for the adoption credit?
- To be eligible for the full available credit amount, your household’s modified adjusted gross income for 2024 must be equal to or less than $252,150. If your modified adjusted gross income is between $252,151 and $292,150, you are still eligible; however, the credit is reduced.
- The adoption credit is fully phased-out for households with a modified adjusted gross income exceeding $292,150.
- A step-parent adoption—adopting your spouse’s child—is not eligible for the adoption credit.
If I am eligible, how do I claim the adoption credit?
- Form 8839, “Qualified Adoption Expenses,” must be completed and attached to your tax return.
- You will need to identify your child via their Social Security number, adoption taxpayer identification number (ATIN), or individual taxpayer identification number.
I have incurred qualified expenses for the adoption in more than one tax year. When do I claim the credit?
- For domestic adoptions, you can claim expenses each year as they are incurred.
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