What Is the Adoption Tax Credit?

The adoption tax credit helps families offset the substantial costs of adopting a child by providing a federal tax credit worth up to $15,950 per child in 2024. Qualified adoption expenses include adoption agency fees, court costs, attorney fees, and travel expenses directly related to the legal adoption of a qualifying child. The credit phases out for taxpayers with MAGI between $239,230 and $279,230 in 2024, and is not available above $279,230. Unlike most tax credits, the adoption credit is not refundable (unless the child is a special needs child), meaning it can reduce your tax liability to zero but won't generate a refund if it exceeds what you owe — though any unused credit can be carried forward for up to five years. For domestic special needs adoptions from the U.S. foster care system, you can claim the full credit regardless of your actual out-of-pocket expenses. If your employer also provides adoption assistance benefits, you may be able to claim both the credit and the exclusion, as long as you don't use the same expenses for both.