7 Things You Need to Know about the Adoption Tax Credit

Posted on June 12, 2024 by Joanie Stein

Growing one’s family through adoption provides prospective parents with an opportunity to experience the joys of raising children and providing them with loving and permanent homes. While the process can be costly, the federal government offers a tax credit to help families offset some of those expenses and reduce their federal tax liabilities.

Families who adopt a child in 2024 may claim a tax credit of up to $16,810 per child in qualifying adoption expenses. Therefore, the amount you can claim depends on the number of children you adopt, for which there is no limit. If you adopt two children in 2024, you may qualify for a $33,620 credit ($16,810 X 2) that can provide a dollar-for-dollar reduction in the amount of federal tax liability you owe for the year. However, like most provisions of the tax code, the federal adoption tax credit can be quite complex. Here are seven points to keep in mind.

To qualify for the tax credit, an adoption must involve eligible U.S. or foreign-born children under the age of 18 or any individual who is physically or mentally unable to care for him or herself. The timing of when you may claim the credit depends on whether the adoption is conducted domestically or internationally, when you pay the expenses and when the adoption is finalized.


For example, if a family with MAGI of less than $252,150 paid $16,000 of qualified adoption expenses in 2024 and received $4,000 in reimbursements from an employer’s adoption assistance program, only the $4,000 may be excluded from gross income in 2024, and the expenses allowable for the adoption credit would be limited to $12,000 ($16,000 of total expenses paid, less $4,000 in employer reimbursements.)

About the Author: Joanie B. Stein, CPA, is an associate director of Tax Services with Berkowitz Pollack Brant Advisors + CPAs, where she works with individuals and closely held businesses to implement sound strategies intended to preserve wealth and improve tax efficiency. She can be reached at the CPA firm’s Miami office at (305) 379-7000 or at