Adoption Tax Credit 2025: FAQs for Adoptive Parents

Whether you’re starting or finalizing an adoption, the federal Adoption Tax Credit can make a big difference as you grow your family. Below are the most commonly asked questions — with clear answers you can use when planning and filing your taxes.

What is the Adoption Tax Credit?

The Adoption Tax Credit is a federal tax break that helps eligible families offset qualified expenses related to adopting a child. Instead of reducing your taxable income, it directly reduces the tax you owe — dollar for dollar.

How much is the Adoption Tax Credit for 2025?

For adoptions claimed on your 2025 tax return (i.e., expenses paid and/or adoptions finalized in 2025), the maximum total credit is $17,280 per eligible child.

Recent Law Change: Partial Refundability

Under changes that took effect starting with the 2025 tax year, up to $5,000 of this credit per child can be refundable — meaning you could receive that portion as a refund even if you owe little or no federal tax. The rest of the credit is still non-refundable and can be used to reduce your tax bill or carried forward (for the non-refundable part).

Who qualifies to claim the credit?

To be eligible for the Adoption Tax Credit, you generally must:

Adopt an eligible child — a U.S. citizen or resident who is:
- under age 18, or
- physically or mentally incapable of self-care.
Be a U.S. taxpayer filing a federal return.
Meet income rules:
- Full credit if your modified adjusted gross income (MAGI) is $259,190 or less in 2025.
- Reduced credit if MAGI is between $259,191 and $299,189.
- No credit if MAGI is $299,190 or more.
File a joint return if married (special rules apply for separate returns or registered domestic partners).

Note: You cannot claim the credit for adopting your spouse’s biological child.

Which expenses count toward the credit?

Qualified adoption expenses include reasonable and necessary costs directly related to the legal adoption of a child, such as:

Adoption agency fees
Court and legal fees
Attorney fees
Travel and lodging (if away from home)
Other required adoption costs (e.g., home studies)

Note: If your employer reimburses you for adoption costs under a qualified adoption assistance program, that amount must be excluded from your expenses before you calculate the credit.

When can I claim the credit?

Timing depends on the type of adoption and when expenses are paid:

Domestic Adoptions

If you pay qualified expenses before the adoption is finalized, you typically claim the credit in the year after the payment.
If expenses are paid in the same year the adoption is finalized, you claim them that same year.

International Adoptions

You claim the credit in the year the adoption is finalized.

Special Needs Adoptions

If a child is deemed a special needs child by a state or tribal welfare agency, you may be able to claim the credit even without documented expenses.

How do the refundable and non-refundable parts work?

Non-refundable portion: Reduces your tax due. Unused amounts can be carried forward up to five years, but these amounts cannot be converted into refundable credit later.
Refundable portion (up to $5,000): You may receive this amount as a refund even if your tax liability is $0.

How do I claim it?

To claim the Adoption Tax Credit, complete IRS Form 8839 (Qualified Adoption Expenses) and attach it to your federal tax return. This form calculates:

Total qualified expenses
Non-refundable and refundable portions
Any carryforward credit from previous years

Final Tips

Keep detailed records of all adoption-related costs.
Be mindful of the income limits and when your expenses qualify.
Consult a tax professional.

Additional Resources

IRS: https://www.irs.gov/instructions/i8839
NCFA: https://adoptioncouncil.org/article/adoption-tax-credit-questions/
Creating a Familly: https://creatingafamily.org/adoption-category/adoption-blog/the-annual-adoption-tax-credit-guide-2025-edition/