IRS
definitions and explanations
The first step is to
learn what the tax credit covers, and how it works with
other incentives, such as employer-paid adoption
benefits.
- The tax credit
applies to domestic and international adoptions, but
the procedure is not the same. Credit for expenses
for international adoptions can be claimed only
after finalization; for domestic adoptions, the
credit can be applied even if the adoption does not
go through.
- The full credit can
be taken for domestic special needs adoption even
when the qualifying expenses don't reach that limit.
- The credit of
$10,630 is per child, not per year, so even if you
claim expenses paid out over more than one year for
one adoption, the total credit amount remains
$10,630.
Then, you'll want to
- determine your
eligibility;
- learn how the
credit works with your particular adoption;
- develop a system to
track and document expenses;
- do your taxes, work
with a professional.
Forms
Form 8839 is the form
you need to file. The form will include expenses covered
by the Adoption Tax Credit, any payments or
reimbursements you may have received from Employer
Adoption Assistance Benefits, and your child's Social
Security or Tax ID number (required for filing).
- To take the credit
or exclusion, complete Form
8839 (PDF), Qualified Adoption Expenses.
You will attach Form 8839 to Form
1040 (PDF) or Form
1040A (PDF) and report the credit on line 52 of
Form 1040 or line 34 of Form 1040A.
- Visit the download
page to view and/or download the forms you'll
need for adoption-related tax filing. Forms are
available in various formats, and include:
- Form 8839 - for
itemizing qualifying adoption-related expenses.
- Form SS-5 - to
apply for a Social Security Number for your
child.
- Form W-7 - to
apply for an Individual Taxpayer ID Number (ITIN)
if your child is a resident or non-resident
alien who does not qualify for an SSN.
- Form W-7A - to
apply for an Adoption
Taxpayer ID Number (ATIN) if you are in the
process of adopting a US citizen or resident,
and cannot get an SSN until the adoption is
final.
