Quick Facts
Maximum Credit: $17,280 per eligible child
Refundable Portion: Up to $5,000 (One Big Beautiful Bill Act)
Carryforward: Up to 5 years
MAGI Phaseout: Begins at $259,190; eliminated at $299,190
The Adoption Credit is a federal tax credit that helps offset the costs of adopting a child. For tax year 2025, the maximum credit is $17,280 per eligible child, and thanks to the One Big Beautiful Bill Act, up to $5,000 of this credit is refundable. Any remaining non‑refundable amount can be carried forward for up to five years.
You may qualify for the credit whether you finalized an adoption or are still in the process, as long as you follow the IRS timing rules explained below.
Who Can Claim the Adoption Credit?
You may qualify if:
- You adopted or attempted to adopt an eligible child, including domestic, foster, special‑needs, or foreign.
- You paid qualified adoption expenses out‑of‑pocket.
- Your MAGI falls below the income limits:
- Full credit if MAGI ≤ $259,190
- Partial credit if MAGI is between $259,190–$299,190
- No credit if MAGI ≥ $299,190
Special‑needs adoptions may qualify for the full credit even if you had little or no expenses.
When Can You Claim Adoption Expenses?
The IRS timing rules differ depending on whether the adoption is domestic or foreign, and whether it is finalized.
Domestic Adoptions
✅ If the adoption is NOT finalized
You claim qualified adoption expenses in the tax year after the year you paid them.
(Example: Expenses paid in 2025 → claimed on your 2026 tax return.)
This is true even if the adoption is not finalized or ultimately fails.
✅ If the adoption IS finalized this year
If finalization occurs in the current year, you may claim:
- All current‑year expenses, and
- All unclaimed expenses from prior years, even if they normally wouldn’t be claimable until the following year.
This overrides the “year‑after” rule.
What If the Child Does Not Have an SSN Yet? (ATIN Requirement)
If the adoption is not finalized and the child does not yet have a Social Security Number, you must apply for an ATIN (Adoption Taxpayer Identification Number) via Form W‑7A.
The ATIN allows you to:
- file your return
- complete tax Form 8839
- claim the adoption credit
According to IRS documentation for the Adoption Tax Credit, the child’s identifying number must be reported, and it must be one of the following:
- SSN (Social Security Number)
- ATIN (Adoption Taxpayer Identification Number) — issued when a child does not yet have an SSN
- ITIN (Individual Taxpayer Identification Number) — for certain cases where an SSN is not available
The credit cannot be claimed without an identifying number.
Foreign Adoptions
You can claim no expenses until the year the adoption is finalized.
Once final, you may claim:
- expenses paid in the year of finalization, and
- prior‑year unclaimed expenses.
Instructions to Enter the Adoption Credit in the Program (Form 8839)
To complete tax Form 8839 (Qualified Adoption Expenses) and include any carryforward from prior years, follow these steps:
Step 1: Navigate to the Adoption Credit Section
- Go to Federal
- Select Deductions & Credits
- Choose Adoption Credit
Step 2: Enter Child and Expense Details
- Provide the adopted child’s:
- Name
- Date of Birth
- Social Security Number (SSN) or Adoption Taxpayer Identification Number (ATIN)
- Input all qualified adoption expenses paid in prior years and the current year.
- If the adoption was finalized in 2025 for a child with special needs, enter the maximum exclusion amount allowed for the current year.
- Report any employer-provided adoption benefits received in prior years or the current year.
- Mark the appropriate box if benefits were received previously.
Step 3: Enter Carryforward Amount
- After entering the child’s details and expenses, click Continue.
- On the summary page, click Continue again to access the Carryforward Entry page.
- Locate your Adoption Credit Carryforward Worksheet from your prior year’s return (found in the PDF).
- This worksheet is labeled “Adoption Credit Carryforward Worksheet—Line 16.”
- Enter amounts from lines 12, 14, 16, 18, or 20 of your 2024 worksheet as directed.
Adoption Tax Credit Amount and Refundability
- For the 2025 tax year, the Adoption Tax Credit is worth up to $17,280 per eligible child for qualified adoption expenses.
- These expenses may include:
- Court and attorney fees
- Travel costs (including food and lodging)
- Other costs directly related to the adoption
- Thanks to the One Big Beautiful Bill Act, up to $5,000 of the credit is refundable in 2025.
- Any unused portion can be carried forward for up to five years.
Special Considerations for Children with Special Needs
Children with “special needs” for adoption tax purposes may differ from other definitions of special needs.
For adoption purposes, a child with a disability does not necessarily qualify as having “special needs.”
A child is typically considered to have special needs for adoption if:
- They are a U.S. citizen at the start of the adoption process.
- A state child welfare agency has determined that returning to the biological parents’ home is not safe.
- The agency has also determined the child is unlikely to be adopted without assistance provided to the adoptive family.
If your employer offers a qualified adoption assistance program and you adopt a child deemed “difficult to place” by the state, you may qualify for the tax credit even if you didn’t pay any qualified adoption expenses.