Everything You Need to Know

Adoption can be a beautiful path toward becoming a parent. An adoption tax credit in 2023 can help you offset the expenses associated with adoption.

To get help from an adoption professional, contact us now. You can also keep reading to learn more about the tax credit for adoption.

Speak with a tax professional to ensure that you have noted your adoption in your W-2 Form. You can also read our guide to employer-provided adoption benefits and learn more about ways to offset your adoption costs.

What is The Federal Adoption Tax Credit?

The federal adoption tax credit helps hopeful adoptive families offset some adoption costs by reducing tax burdens for families who have completed an adoption during the previous year.

How Much is the Adoption Tax Credit in 2023?

Your financial situation will affect the amount you can receive for the adoption tax credit, but the most you can receive for the 2023 Federal Adoption Tax Credit (when you file your taxes in 2024) is $15,950 per eligible child.

The adoption federal tax credit limits are based on your modified adjusted gross income (MAGI), and the amount you can receive decreases if you have an income over a certain threshold. In 2023, if your modified adjusted gross income is greater than $279,230, you will be unable to claim the credit, and if your income is $239,230 to $279,230, you will be able to claim a reduced amount of credit.

How Does the Adoption Tax Credit Work?

Tax credits for adoption are based off of qualified adoption expenses.

A family can add up several expenses to claim an adoption tax credit, including:

  • Legal fees
  • Adoption court fees
  • Agency fees
  • Travel
  • Meals while traveling

 The adoption tax credit can then be subtracted from the amount of taxes you owe.

If a child is adopted through the state and is considered special needs, the parents can receive the full amount of the credit regardless of expenses.

You can visit the IRS website to learn more about qualified adoption expenses.

When Can I Claim a Tax Credit for Adoption?

Adoption tax credits are generally claimed in the year that they are completed. For example, if you complete an adoption in 2023 when you fill out your taxes in 2024, you should have your records ready from your adoption.

Some of the documents you may need include:

  • The adoption decree
  • Court documents 
  • A placement agreement from your adoption agency
  • A state’s determination for children with disabilities, if applicable
  • Your child’s social security number

If you need any help determining what forms you need and how to fill them out, tax professionals, as well as our adoption specialists at American Adoptions, can help. Contact us online at any time to get the help you need today.

Can I Claim the Adoption Tax Credit before Finalization?

In some cases, a child can be under your care when tax season comes around but before finalization is complete. In these cases, parents sometimes wonder if they are able to claim the adoption tax credit. You will generally receive your child’s social security number with your child’s birth certificate after the finalization hearing.

You should have your attorney apply for a Social Security Number along with a birth certificate that reflects the adoption after your finalization hearing. In some cases, your accountant can apply for a temporary adoption tax ID number that you can use to file taxes for the year.

Are there State Tax Credits for Adoption?

Some states offer tax credits for adoption, while other states do not. You can ask a tax professional to get the most up-to-date information on tax credits for your state.

Can I get a Tax Credit for Adoption as a Stepparent?

Stepparents cannot receive an adoption tax credit if they complete an adoption.

Is My Adopted Child Considered a Dependent?

Once adoptive parents have a child under their care and are providing more than half of a child’s support, the adoptive parents can consider their child as a dependent and mark them as a dependent as they would a biological child. This applies even if adoption finalization is not complete.


To get more information on the 2023 adoption tax credit, you can fill out our online contact form. Be sure to speak with a reputable tax professional, too.