Adoption Tax Credit

The federal adoption expense income tax credit was increased in 2003. Adopting and adoptive parents are allowed a federal tax credit of up to $10,160 per child, whether the adoption is domestic or international. In domestic adoptions, parents can claim a credit based on qualifying expenses even if the adoption does not move through to finalization. Parents adopting a U.S. child with special needs can take the full credit without qualifying expenses. The tax credit is separate from, but must be coordinated with, any adoption benefits provided by employers.

Stepparent adoptions are not included in the federal adoption tax credit.

Individual states also offer tax benefits to adopting and adoptive parents. Until recently, the cap on state credits was $2,000 per child; however, recent legislation has seen some states boost this amount considerably. 

More information on Tax Benefits for Adopting & Adoptive Parents

1. Getting Started with Adoption
2. How Many People Choose Adoption?
3. Is Adoption Right for You?
4. Adoption Self-Assessment Quiz
5. Which Children Are Available for Adoption?
6. Sibling Groups
7. Who Can Adopt?
8. Qualification Requirements for Adopting Parents
9. Your Adoption Options
10. Agency Adoption
11. Private (or Independent) Adoption
12. Options in Independent Adoption
13. Adoption Facilitators
14. International Adoption
15. Foster Adoption
16. Stepparent Adoption
17. Transracial Adoption
18. Special Needs Adoption
19. Military Adoption
20. Making an Adoption Plan
21. Selecting an Adoption Professional
22. Getting an Adoption Homestudy
23. Adoption Costs
24. Why Do Costs Seem So High?
25. Help Handling the Costs of Adoption
26. The Adoption Tax Credit
27. Adoption Subsidies
28. Employer Adoption Benefits
29. Networking & Networking Tools
30. Legal Issues in Adoption
31. Evaluating Adoption Risks
32. Open Adoption
33. Breastfeeding the Adopted Child
34. Coping With the Wait
35. Glossary of Terms
36. Recommended Reading
37. Conclusion