Federal Adoption Tax Credit
Updated April 2014
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Please note: The adoption tax credit is a one-time credit per child. If you have received your adoption tax credit for an adoption, you do not apply for an additional adoption tax credit in future years.
Since 2003, families who adopted a child with special needs from foster care could claim a federal adoption tax credit even if they had no adoption expenses. Children who receive adoption assistance/subsidy benefits are considered children with special needs. Other adoptive families are also eligible for the credit, but must have (and be able to document, if requested by the IRS) qualified adoption expenses.
The tax credit was refundable for 2010 and 2011, but not for 2012 or future years. A refundable tax credit is one you get back regardless of what you owe or paid in taxes for the year. When the credit is not refundable, you receive only what you have in federal incomet tax liability.
As of April 16, 2014, families who adopted from 2005 to 2010 will only be able to benefit if they filed for an extension back when they filed their 2010 taxes. Those taxpayers who filed for their 2010 taxes on time (by the normal deadline of April 15, 2011) can no longer benefit from the adoption tax credit. (Families who adopted before 2005 will not benefit. Read the fact sheet on adoptions before 2010 for more information.)
The amount of the credit is based on the year the adoption finalized:
The credit is claimed one time for each adopted child with special needs.
Below, we explain the basics of the adoption tax credit.
To be eligible for the credit, you must:
- Have adopted a child other than a stepchild — Children who receive a monthly adoption subsidy payment have been determined by the state to have special needs, so these children are eligible for the full tax credit without documenting expenses. Families who adopted children without special needs are also eligible, but need to have (and be able to document, if asked) qualified adoption expenses.
- And be within the income limits — How much of the credit you can claim is based on income. For 2013, families with a federal modified adjusted gross income above $234,580 cannot claim the credit; families with incomes above $194,580 can claim part credit. Anyone with incomes below the lower amount should be able to claim the full credit. (Adoptions from previous years had different income limits; 2014 income limits are $237,880 and $197,880.)
If You Adopted in 2014
You will claim the credit when you file your 2014 taxes next year. Read our fact sheet for more information.
If You Adopted in 2013
You need to amend your 2013 taxes. Read our fact sheet for more information.
If You Adopted in 2012
You will need to amend your 2012 taxes. Read our fact sheet for more information.
If You Adopted in 2011
You will need to amend your 2011 taxes (or file an original tax form if you didn't file in 2011). Read our fact sheet for more information.
If You Adopted between 2005 and 2010
Tax year 2010 closed at the end of the day on April 15, 2014, which means it is too late for you to receive any refund due that year unless you filed for an extension when you filed your 2010 taxes.If you did not file for an extension back when you were doing your 2010 taxes, you cannot benefit from an adoption tax credit from 2010 or earlier.
If you did file for an extension on your 2010 taxes, there is a possbility you can still benefit from adoptions from 2005 to 2010. Read our fact sheet for more information.
If You Adopted before 2005
Those who adopted before 2005 cannot benefit since all of the tax years from 2009 and back are closed.
Below are links to a number of resources for adoptive families.
NACAC's resources focus on adoptions of children with special needs from foster care, but may also be of use to other adoptive families.