Can I get an adoption tax credit?

The decision to adopt a child can be a big one. You might be giving a child a home that he or she desperately wants and needs while at the same time resizing and reshaping your family dynamic. During such a time, there is a lot to consider. Where the child will sleep, how he or she will be introduced to the rest of the family, how to make the child feel comfortable, and whether to allow biological parental contact are all very serious matters that require careful consideration.

But another issue with adoption is the expense of the process. Working with the professionals who are necessary to complete the process can be costly. Oftentimes adoptive parents also have to travel to visit the child, which can accumulate to a rather large expense. Though these expenditures can add up, the government does not want the cost to deter you from considering adoption. That is why the IRS offers adoption credit and other assistance programs to help you deal with the expense of adoption.

Once you adopt a child you may qualify for a tax credit and an exclusion for any support you may have received from employer-provided adoption assistance. For the 2014 tax year, the adoption credit maxed out at $13,190, which is no small amount. In order to qualify for these benefits, the expenses must have been either necessary and reasonable adoption fees, court costs or lawyer fees, travelling expenses, or other costs directly related to the adoption.

It is worth noting that there are income limits in order to qualify for these programs, and other legal adoption issues may come into play. This is why an adoption attorney may be beneficial. He or she may be able to help you navigate the adoption process in a way that allows you to start your new family off on the right foot.

Source: IRS, “Topic 607 – Adoption Credit and Adoption Assistance Programs,” accessed on Aug. 30, 2015