Adopting a child is a long, difficult and sometimes expensive process. But along with all the other tax breaks for parents, the adoption credit can help ease the financial stress of adding a new child to the family.


The Adoption Credit is a nonrefundable tax credit. That means it can’t give a refund by itself, but it does take a good chunk off the top of the tax liability. So much, in fact, that taxpayers probably won’t even be able to use up all the credit in one year. The good news is it can roll over what isn’t used for up to five years.

The Adoption Credit has a maximum value of $13,810 for tax year 2018. If adoptions costs are less than the maximum, what is actually paid is the maximum credit (unless it’s a special needs adoption – see below). And the total is not just for one year’s expenses, but the total for the adoption, which can span years.

The credit offsets qualified adoption expenses, such as court costs, attorney fees, traveling expenses (meals and lodging), and other related expenses.

A qualifying adoptee must be one of the following:

-A child who is a U.S. citizen or resident (including U.S. territories) when the adoption process begins

-A child who is not a U.S. citizen when the adoption process begins

-A child under the age of 18 or who is physically or mentally unable to care for themselves

If adopting a U.S. citizen or resident, taxpayers must wait one year before claiming the credit for qualifying expenses. Starting the adoption process this year means you claim any qualified expenses on next year’s return.

If adopting a child who is not a U.S. citizen or resident, you must wait until the adoption is final before claiming the credit.

The total value of the credit begins dropping when your modified adjusted gross income (MAGI) is $207,140, and phases out completely when your MAGI exceeds $247,140.

Special Needs Adoption

If you’re adopting a special needs child, you may be entitled to the full credit even if you had little or no out-of-pocket costs.

For a special needs child, certain eligibility requirements must be met:

-The child must be a U.S. citizen or resident when the adoption process begins.

-A state (including the District of Columbia) must have determined that the child should not and cannot return to their parent’s home.

-A state has determined that the child will not be adopted unless financial assistance is provided.  (WLAF NEWS PUBLISHED – 02/04/2019-6AM)