What is the Adoption Tax Credit Amount?
The Adoption Tax Credit is designed to help families offset the cost of adopting a child. As of 2023, the maximum adoption tax credit amount is $15,950 per child. This credit is non-refundable, meaning it can only reduce your tax liability to zero, but any excess amount cannot be refunded to you.
Eligibility Criteria
To qualify for the Adoption Tax Credit, the adoption must be finalized, and the child must be under the age of 18 at the time of adoption. Additionally, the credit applies to both domestic and international adoptions, though special circumstances may apply for certain types of adoptions, like those involving special needs children.
Income Limits
There are income limits for claiming the Adoption Tax Credit. For tax year 2023, the credit begins to phase out for single taxpayers with a modified adjusted gross income (MAGI) above $239,230 and for married taxpayers filing jointly with a MAGI above $239,230. The credit completely phases out at a MAGI of $279,230 for married couples.
Filing for the Credit
To claim the Adoption Tax Credit, you must complete IRS Form 8839, Qualified Adoption Expenses, and submit it with your tax return. Make sure to maintain records of all expenses related to the adoption process, as these will be required for substantiation when claiming the credit.