{"id":351556,"date":"2016-04-04T11:02:24","date_gmt":"2016-04-04T16:02:24","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/family\/adoption\/adoption-tax-credit.html"},"modified":"2024-09-25T11:32:00","modified_gmt":"2024-09-25T16:32:00","slug":"adoption-tax-credit","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/family\/adoption\/adoption-tax-credit.html","title":{"rendered":"Adoption Tax Credit"},"content":{"rendered":"\n
\n \n
\n

Adoption Tax Credit<\/h1>\n
\n
\n By Lisa Burden, J.D.<\/a> | Legally reviewed by John Mascolo, Esq.<\/a>\n | Last updated\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
\n

This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
\n

The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n

\n

Adopting a child can cost thousands of dollars. Federal and state tax benefits can help reduce the cost. <\/p>\n\n <\/div>\n\n

Adoption expenses often come as a surprise to adoptive parents. You can take a tax credit on your state and federal tax returns for the adoption fees and certain other out-of-pocket expenses you incurred in the adoption of your child.<\/p>\n

Taxes and audits can be complicated for adoptive parents. If you need help with tax credits, you may want to discuss your situation with an attorney<\/a>.<\/p>\n

How Much Is the Adoption Tax Credit?<\/h2>\n

The allowed maximum amount for the federal tax adoption credit for tax year 2024 is $16,810 per child \u2014 up from $15,950 in 2023. The maximum amount adjusts each year based on inflation, which means it increases by a small amount each year.<\/p>\n

The federal adoption tax credit <\/a>has been around since 1996. Back then the maximum credit for adoption expenses per adopted child was $5,000. The tax credit has since increased.<\/p>\n

How Does the Federal Adoption Tax Credit Work?<\/h2>\n

As the taxpayer, you subtract the adoption tax credit from your tax liability for the given tax year. This means you receive a "dollar for dollar" reduction of your federal tax liability. Depending on the circumstances, a taxpayer who paid qualifying tax expenses may claim the credit in the tax year that they paid the expenses or in the following tax year.<\/p>\n

The federal tax credit is available for domestic adoptions (those that occur within the United States), as well as international adoptions.<\/p>\n

You can carry forward any unused credit for five years.<\/p>\n

Taxpayers who adopt a spouse’s child can’t claim the tax credit.<\/p>\n

What Are Qualified Adoption Expenses?<\/h2>\n

The federal tax credit reimburses adoptive parents for \u201cqualified adoption expenses." Qualified adoption expenses are those expenses that are \u201creasonable and necessary."<\/p>\n

Adoption expenses may include:<\/p>\n