What are adoption tax credits and how do they work?

What are adoption tax credits and how do they work?

Adoption tax credits are financial incentives provided by the government to help offset the costs of adopting a child. They can cover expenses like adoption fees, court costs, and attorney fees.

How much can I claim as a tax credit for adoption?

For the tax year 2023, the maximum adoption tax credit is $15,950 per child. This amount may change annually, so it's good to check the latest IRS guidelines.

Are there any income limits for claiming the adoption tax credit?

Yes, there are income limits. The credit begins to phase out for taxpayers with modified adjusted gross incomes above $223,410 and is completely phased out at $263,410.

Can I claim the credit if I adopt a child from another country?

Absolutely! The adoption tax credit applies to both domestic and international adoptions, as long as you meet the necessary requirements.

What documents do I need to provide to claim the credit?

You'll need to provide documentation of your adoption expenses, such as receipts and legal documents, along with Form 8839 when filing your taxes.