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Home > Adoption > Adoptive Parents > Adoption Tax Credit

Adoption Tax Credit

Since it was established in 1997, the Adoption Tax Credit has helped thousands of American families offset the high cost of adoption or meet their adopted children’s special needs.  Adoptive families are able to take a “credit” on their federal individual income tax returns in the year they finalize (1) if the family owes any federal taxes, and (2) if the family’s income is below a certain dollar amount.  In some cases, the family can take part of the total credit rather than the entire credit.  Also, the credit can be used for up to five years until a qualified family takes the entire dollar amount available to them.

As an example, here are the allowable amounts if an adoption is finalized in 2018: the maximum Adoption Tax Credit allowed is $13,840 (up from $13,570 in 2017).  Adoptive families with a modified adjusted gross income less than $207,580 can claim the tax credit, and those with an adjusted gross income between $207,580 and $247,580, have a sliding scale maximum allowed. Those with an adjusted gross income over $247,580 cannot claim the Adoption Tax Credit.

It is crucial for adoptive families to seek out expert tax advice on what expenses are allowable and how to properly claim them on a tax return.

What sorts of adoptions are eligible to take the Adoption Tax Credit? Both independent and agency adoptions qualify. Also both domestic and intercountry adoptions qualify. Kinship or family adoptions qualify. The only exception is step-parent adoptions; they do not qualify.

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The Academy of Adoption and Assisted Reproduction Attorneys (AAAA) is a credentialed organization dedicated to the competent and ethical practice of adoption and assisted reproduction law. It advocates for laws and policies to protect the best interests of children, the legal status of families formed through adoption and assisted reproduction, and the rights of all interested parties.

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DISCLAIMER: The Academy of Adoption and Assisted Reproduction Attorneys (AAAA) website is designed for general information only. Nothing on this website establishes an attorney-client relationship with AAAA or any of its member-attorneys.  AAAA website content does not constitute legal advice from AAAA or its member-attorneys to any reader or to the general public.  The law constantly changes and varies across state and international borders.  Consult qualified legal counsel in your jurisdiction regarding your particular situation. Click here for the AAAA Attorney Directory. The names and contact information included on this site are for the purpose of searching for an attorney for a particular legal case. The contact information may not be used for commercial, promotional, or advertising purposes.

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