Dec. 21, 2021
Did you know the Internal Revenue Service grants an adoption tax credit up to $14,300.00?
This means you will get a big refund at tax time for your adoption expenses, (if you pay income taxes).
The tax credit is for “qualified” adoption expenses and will reimburse your:
Reasonable and necessary adoption fees;
Court costs and attorney fees;
Traveling expenses (including amounts spent for meals and lodging while away from home); and
Other expenses that are directly related to and for the principal purpose of the legal adoption of an eligible child.
The child must be under 18 years of age or be physically or mentally incapable of self-care.
If your income is over a certain very high limit the tax credit will not apply.
The tax credit does not apply to stepparent adoptions, but does apply to family member adoptions and private adoptions including the adoption of a domestic partner's child.
The tax credit usually applies in the year the expense was paid, however in a domestic adoption, qualified adoption expenses paid before the year the adoption becomes final are allowed as a credit for the tax year following the year of payment (even if the adoption is never finalized).
Of course the Internal Revenue Service requires completion of Form 8839, and you should consult an accountant or tax lawyer to help you get the credit.
For more information see the Internal Revenue Service publication “Topic No. 607 Adoption Credit and Adoption Assistant Programs”.