Who is eligible?

  • Families with a modified adjusted gross income of less than $243,000. (There is a phasing out of the credit beginning at $203,000.)

What adoptions are eligible?

  • The adoptive child must be under the age of 18.
  • If the child is physically or mentally incapable of caring for himself/herself, no age limit applies.
  • NOTE: Expenses related to the adoption of stepchildren are considered non-qualified expenses.

How much is the tax credit?

  • The maximum credit for 2017 is $13,570 per child.

What expenses are eligible?

Examples of eligible adoption expenses, as defined in section 23(d)(1) of the Code, include:

  • Reasonable and necessary adoption fees,
  • Court costs and attorney fees,
  • Traveling expenses (including amounts spent for meals and lodging while away from home), and
  • Other expenses that are directly related to and for the principal purpose of the legal adoption of an eligible child.

What expenses are not eligible?

  • Expenses associate with establishing legal guardianship;
  • Allowed as a credit or deduction under any other federal income tax rules;
  • Reimbursable under a federal, state or local program or from another employer or party;
  • In violation of federal or state law;
  • Associated with a surrogate parenting arrangement;

For additional information about exclusions and income limits, please refer to IRS guidelines, available online at http://www.irs.gov/taxtopics/tc607.html. Please contact a personal tax advisor with any questions.


To read the full article “Tax Benefits for Adoption: The Adoption Tax Credit,” written by Executive Director of Lifeline, Herbie Newell, click here.