Adoption Tax Benefits

Since 2003, families who adopt a child from the U.S. with special needs from foster care can claim a federal adoption tax credit even if they had no adoption expenses.  Children who receive adoption assistance/subsidy are considered children with special needs. Other adoptive families are also eligible for the credit, but must have (and be able to document, if requested by the IRS) qualified adoption expenses. Though previously refundable (2010 & 2011), the adoption tax credit is not refundable for 2012, 2013, 2014 or beyond. A refundable tax credit is one you get back regardless of what you owe or paid in taxes for the year. When the credit is not refundable, you receive only what you have in federal income tax liability.  The maximum 2014 credit is $13,190.  Even if the adoption process started in 2011 or expenses were incurred in 2011, any credit claimed in 2014 is non-refundable.  Explore resources from the North American American Council on Adoptable Children  (NACAC) and others below for eligibility information pertaining to the year that your adoption was finalized.

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