close menu

Get Free Info

2022 Adoption Tax Credit Information

Did you know you may be eligible for adoption tax benefits to offset your qualified adoption expenses?

Taxes can be confusing. To help you out, we’ll explain basics of the adoption tax credit and answer some common questions about it. Keep in mind that this article should not be taken as financial advice, though. It is always a good idea to speak with a tax professional, too.

If you’d like to get more adoption information now, then you can fill out our online contact form whenever you need us. For now, you can continue reading to learn exactly what you need to know about the adoption tax credit.

The Federal Adoption Tax Credit

Although the exact details of the adoption tax credit have shifted over the years, it has been around in one form or another for quite some time. In January 2013, the Federal Adoption Tax Credit was made permanent. It’s a way for hopeful adoptive families to offset some adoption costs.

Is the Adoption Tax Credit Refundable?

The adoption credit is not refundable, which means that only people with tax liability (taxes owed) will benefit. If you are unsure how this will affect your eligibility to use the adoption tax credit, then you should speak with a tax professional.

How Much is the Adoption Tax Credit?

The amount you can receive from the Federal Adoption Tax Credit depends on your financial situation. Below is a table outlining the maximum amount available for the 2021 Federal Adoption Tax Credit as well as some previous years.

Tax Year

Maximum Amount Available*

Adoption Tax Credit 2016


Adoption Tax Credit 2017


Adoption Tax Credit 2018


Adoption Tax Credit 2019


Adoption Tax Credit 2020


Adoption Tax Credit 2021


*The maximum amount available will continue to grow each year with the cost of living. It should also be noted that the maximum amount available is per child.

If a child welfare agency deems a child hard to place, then the adoption tax credit for that child will remain flat. This allows you to claim the maximum credit regardless of expenses. So, talk to your adoption professional to determine if you qualify for this.

The adoption tax credit income limit is based on modified adjusted gross income (MAGI). Every year, it’s recalculated based on the current cost of living. For the 2021 Adoption Tax Credit, the maximum amount available will be available for those with a MAGI below $216,660. The credit will begin to phase out for families with a MAGI above that amount and will be unavailable to families with incomes of $256,660 or above.

Adoptive parents who work for companies with an adoption assistance program can also receive tax breaks. Parents can receive up to $14,440 in reimbursement from their employer for adoption expenses without paying taxes on that benefit. But, you can’t double-dip, meaning you cannot take a tax credit for adoption expenses already reimbursed by your company.

Speak with a tax professional to make sure this is correctly noted in your W-2 Form. You can also read our guide to employer-provided adoption benefits to learn more about these adoption assistance programs.

How Does the Adoption Tax Credit Work?

According to the IRS, qualified adoption expenses make up the amount a family can claim on the adoption tax credit. These include items like:

·         Adoption fees

·         Attorney fees

·         Court costs

·         Travel expenses (including meals and lodging) while away from home

·         Re-adoption expenses relating to international adoption

Qualified expenses must be solely put toward adoption costs, meaning funds allowed as a credit or deduction under any other provision in the tax law cannot be applied toward the adoption tax credit.

Qualifying expenses must be accrued in a domestic, international or foster care adoption. Unfortunately, there is no federal stepparent adoption tax credit or surrogacy tax credit. For a full list of adoption expenses the IRS does not qualify, visit their website to learn more.

For domestic adoptions, you can claim the tax credit for qualified expenses within the year the adoption is completed. If the adoption is not completed, then you can claim the credit the following year. Be sure to keep a close record of your adoption, as the adoption tax credit could be audited by the IRS for authenticity. You’ll want to be ready with documents like:

·         The final adoption decree

·         A placement agreement from an authorized agency

·         Court documents

·         A state’s determination for children with disabilities, if applicable

·         And more

If you need any help determining what forms you need and how to fill them out, American Adoptions can help. Contact us online at any time to get the help you need today.

State Tax Credits for Adoption

Some states offer an additional tax credit for adoption to their residents. If you live in a state that offers a state-level adoption tax credit, then ask your tax professional if you could be eligible to receive these credits, too.

The Tax Credit for Adoption Disruptions

Families that experience an adoption disruption could also benefit from the adoption tax credit. You may also be able to deduct qualifying adoption expenses from a disrupted adoption.

But, families must wait one year before filing for the credit. The maximum credit level still applies regardless of how many adoptions or disruptions a family experienced during the year. Make sure you speak with a tax professional to see if your family is eligible for a failed adoption tax credit, as this situation can be pretty complex.

Dependency Tax Exemption

Adoptive parents can take the same dependency exemption on their income taxes for children they adopt as they would for biological children. This applies whether the adoption has been finalized or not.

But, the child must already be placed with the family for them to eligible for dependency. Families must provide more than half of a child's support to list the exemption, too.

Claiming the Adoption Tax Credit before Finalization

Every year, adoptive families ask if they can file taxes without their child’s social security number, which is typically received after the adoption is finalized. Adoption finalization typically occurs around six months after placement in a domestic infant adoption. This means your child could already be under your care when it is time to file taxes, but the finalization hearing hasn’t happened yet.

Your attorney should apply for an SSN along with the amended birth certificate after the finalization court hearing. If you do not have these items yet, then your accountant can apply for a temporary adoption tax ID number. Typically, you can file your taxes with that number.


This is a lot of information to soak in all at once. So, we understand if you have some more questions about the adoption tax credit. That’s why you can always fill out our online contact form to get more free information now. Be sure to speak with a reputable tax professional, too.

Information available through these links is the sole property of the companies and organizations listed therein. American Adoptions provides this information as a courtesy and is in no way responsible for its content or accuracy.

Request Free Information

Join Us Now
Adoption Home Study

Adoption Home Study Process

Learn what a home study is and why you need one to adopt a child.

Read More

Home Study Questions and Answers

While adoption home studies vary slightly from agency to agency and state to state, there are several key elements that are almost always included in every home study.

Read More

Home Studies: State by State

Find a qualified professional in your state to complete your home study.

Read More
Frequently Asked Questions

Do we need to retain our own attorney?

No, American Adoptions has established relationships with some of the best adoption attorneys in the nation. Because adoption laws vary from state to state and between counties, it is important to utilize the services of an adoption attorney who specializes in the state where the adoption will finalize, which is unknown until you match with an expectant mother. You have the right to retain your own attorney, but doing so may be an additional, unnecessary expense.

Can we choose the gender of our baby?

American Adoptions does not allow gender specificity in adoption. Any family who wishes to be gender-specific in their adoption should contact us at 1-800-ADOPTION and ask about the possibility of an exception waiver before taking any other steps toward adoption with our agency. Any families who do receive an exception to be gender-specific may also incur an additional fee, which helps cover the additional advertising costs of such a request.

Please note that gender specificity will likely increase your wait time significantly.

Additional Resources

Adoption Newsletter

Did you know that American Adoptions offers a free bi-weekly e-newsletter? Sign up today to keep up-to-date on the latest in adoption news and information.

Sign Up

Famous Adoptions

Learn which famous Hollywood actors, sports stars, politicians and other icons have been touched by adoption.

Read More

Adoption Glossary

Do adoption terms and phrases leave you feeling confused? Learn the meaning to key adoption words and phrases with our comprehensive adoption glossary.

Read More