The adoption tax credit is a non-refundable credit provided to adoptive parents. It offers a great solution to offset some of the costs of adoption. According to the IRS, the adoption tax credit for 2018 has been increased to $13,840.
Who Can Claim the Credit?
The guidelines for the credit still state that the child must be either under 18 years old or mentally unable to take care of him or herself. Parents who adopt children with special needs can claim the maximum credit.
Currently, adoptive parents whose incomes are over $247,580 are not eligible for the credit and taxpayers who make over $207,580 (in modified gross adjusted income) per year are subject to phaseouts.
The Adoption Tax Credit is Non-Refundable
In addition, Senators Roy Blunt and Bob Casey, who proposed the Adoption Tax Credit Refundability Act of 2015, continue to work towards making adoption tax credit refundable alongside the Adoption Tax Credit Working Group. Currently, the non-refundable credit can’t be claimed by families that have no tax liability. This act would allow lower to moderate income families that have no tax liability to claim the current nonrefundable tax credit.
In order to take advantage of the adoption tax credit, we strongly recommend that you consult with a tax professional to determine the extent of the credit available to you. AdoptHelp is dedicated to creating new, loving families through adoption. For all inquiries regarding the adoption process, please contact us or give us a call at 800-637-7999.
Please note that we are adoption professionals and can discuss our program, but any specific information about the tax credit (like whether or not you qualify) should be directed to a tax attorney or accountant.
Also Read: How the Adoption Tax Credit Works