ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Helping to Offset the Cost of Adoption: The Adoption Tax Credit

Updated on June 15, 2010

When you consider or go through the process of an adoption, the costs and the thoughts of various costs to be incurred, can be overwhelming. Between the cost of a search, home study, legal fees and expenses, not to mention the ordinary costs of bringing a new child into your home, you are suddenly faced with a burden that might have been inconceivable before you decided to adopt. But teh tax code does provide some relief.

You may be entitled to a tax credit for qualifying expenses you pay to adopt a child. You do not have to deduct the expenses from income, but instead, the adoption credit directly reduces your tax liability. Generally the credit may only be taken in the year the adoption is finalized, but you may carryover qualified expenses incurred in the year prior to the adoption. Only unreimbursed expenses are eligible for the credit. There is, however, an additional available exclusion from gross income for certain qualifying, adoption-related expenses paid to you by your employer.

Examples of expenses that qualify are: reasonable and necessary adoption fees, court costs, attorney fees, travel expenses (including meals and lodging while away from home), and other expenses directly related to and for which the principal purpose is the legal adoption of an eligible child.

An eligible child is one who is under 18 years old, or is physically or mentally incapable of providing his or her own care. The adoption credit may be taken with respect to an eligible child who is an American citizen or resident of the United States, or for a non-resident, who is not a citizen after the adoption is final.  Thus, it is true that, with respect to a domestic adoption, many expenses will qualify for the credit even before the adoption is final, or even if it never becomes final. 

Both the credit and exclusion are subject to dollar limits and limitations on the income of the adopting parent.  These limits are adjusted annually to reflect inflation and the changing costs relating to adoption.  For an adoption of a special needs child only, there are certain expenses relating to the specific needs of the child that are eligible for the credit or exclusion. 

Generally, if you are married, you must file a joint return to take the adoption credit or exclusion. If your filing status is married filing separately, you can take the credit or exclusion only if you meet special requirements.

The tax code has provisions to help ease the burden on adopting parents.  If you're considering an adoption, take full advantage of these benefits to make sure you come through the adoption in sound financial shape.

For more assistance with legal adoption issues or the adoption tax credit, contact the Thompson Law Office today by calling toll free (888) 322-8975 or (317) 604-1276. 


    0 of 8192 characters used
    Post Comment

    No comments yet.


    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

    Show Details
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)