Federal Adoption Tax Credit Update and Provisions for 2023

The federal adoption tax credit is for finalized domestic and international adoptions or failed domestic adoptions. The federal adoption tax credit is $15,900 and is meant to offset the out-of-pocket cost of adoption.

If you are unsure whether you qualify or need to take steps to receive your tax credit, you should consult a tax advisor or CPA. You might be eligible for this credit if you adopted a child or had a domestic adoption fail in 2022. 

What Are the Restrictions? 

Before you apply for this tax credit, it’s important to note that there will be restrictions based on your gross income. For example, if your gross income

• Is $279,230 or more for the year, you will not be eligible to receive this tax credit. 

• Is less than $239,230 a year, the $15,900 tax credit will be available to you. 

• Is between $239,230 and $279,230, you will be eligible for a reduced amount.

The tax credit is intended to cover: 

• Adoption-related expenses
• Court costs
• Attorney fees
• Traveling expenses 
• Agency fees 

When Can an Adoptee Claim an Adoption Tax Credit, and How is a Claim Filed? 

You may be eligible for the adoption tax credit if your adoption finalized in 2022 and you’ve spent any money on adoption expenses and make less than $239,230 a year. To claim your credit, you’ll need to file Form 8839 with your tax returns and provide information about the child you adopted, any expenses incurred, and any employer-provided adoption benefits received. 

Contact an Adoption Attorney Today 

If you adopted a child or had a domestic adoption fail in 2022 and are wondering if you can file for a federal adoption tax credit, reach out to your tax advisor or CPA. The federal tax credit can help many families recover their adoption expenses.

For other adoption matters, Dempsey Law’s experienced team of attorneys is ready to offer assistance and specialized knowledge to help you during all stages of your adoption process. Contact us via our website or call (704) 251-2500 if you’re a North Carolina resident or (561) 489-2248 if you’re a Florida resident.