Adoption Tax Credit
The Adoption Tax Credit is a non-refundable tax credit available to taxpayers who incur qualified expenses related to the adoption of a child. This credit is designed to help offset the costs associated with the adoption process, which can include adoption fees, legal expenses, and travel costs.
The amount of the credit can vary each year and is subject to phase-out based on the taxpayer’s modified adjusted gross income (MAGI). For example, if the adoption is finalized in a given tax year, taxpayers can claim the credit when filing their tax return for that year. As of recent years, the maximum credit can be several thousand dollars, thereby providing significant financial relief to adoptive parents.
It’s important to note that the adoption of a child with special needs may qualify for the full credit amount regardless of the actual expenses incurred. Taxpayers should consult current IRS guidelines or a tax professional to ensure they meet the eligibility requirements and to determine the specific amount they can claim.
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