Adoption Tax Benefits: An Overview

Adoption Tax Benefits: An Overview
October 19, 2020
The federal government supports adoption in two primary ways: federal grants to state
governments and tax benefits for individual taxpayers that help offset the costs of adopting a
Margot L. Crandall-Hollick
child. This report focuses on federal adoption tax benefits, which consist of an adoption tax credit
Acting Section Research
and an income tax exclusion for employer-provided adoption assistance.
Manager

The adoption tax credit helps qualifying taxpayers offset some of the costs of adopting a child.
Although the credit may be claimed for nearly all types of adoptions (excluding the adoption of a

spouse’s child), there are some special rules related to claiming the credit for international
adoptions and for adoptions of children with special needs (generally children whom the state child welfare agency considers
difficult to place for adoption).
In 2020, taxpayers may be able to receive an adoption credit of up to $14,300 (this amount is annually adjusted for inflation).
The credit is reduced for taxpayers with income over $214,520 and is phased out completely for taxpayers with more than
$254,520 in income (these amounts are subject to annual inflation adjustment). The adoption credit is not refundable.
However, the credit may be carried forward and claimed on future tax returns for up to five years after initially claimed.
In addition, taxpayers whose employers offer qualifying adoption assistance programs as a fringe benefit may not have to pay
income taxes on some or all of the value of this benefit. The amount that can be excluded from a taxpayer’s income is capped
at a maximum amount per adoption, which is the same as the maximum amount of the credit: $14,300 in 2020. Taxpayers
can claim the exclusion and the credit concurrently for the same adoption, but cannot claim both tax benefits for the same
expenses. Many of the eligibility rules for the adoption tax credit apply to the exclusion for employer-provided adoption
assistance.
The legislative history of the current adoption tax benefits indicates that Congress enacted these incentives to encourage more
adoptions. However, there is currently little evidence that adoption tax benefits are an effective policy tool to increase
adoptions. Instead, data suggest that adoption tax benefits are often a windfall to families that would have adopted in their
absence. In addition, the vast majority of adoption tax benefits go to upper-income Americans, even though data indicate that
a significant number of lower- and middle-income Americans adopt. Finally, recent evidence suggests that adoption tax
benefits have been difficult for the IRS to administer in terms of keeping both erroneous benefit claims and taxpayer burden
low.
In light of these concerns with current adoption tax benefits, Congress may consider modifying the credit or the exclusion for
employer-provided adoption assistance to achieve certain policy goals. For example, Congress may move to replace these
benefits with a direct spending program, especially if Congress views direct spending as more effective at encouraging
adoptions. Alternatively, Congress could eliminate adoption tax benefits and direct any additional revenue to deficit
reduction. Congress could also choose to make the adoption tax credit refundable, so that taxpayers with little or no tax
liability could claim the entire value of the credit in a given year. Or Congress could modify adoption tax benefits in other
ways, such as changing the maximum amount of the credit or the income level at which the credit phases out. Finally,
policymakers could modify some of the eligibility rules or methods to make the credit easier to administer.

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Contents
Introduction ..................................................................................................................................... 1
Brief Overview of Adoption in the United States ............................................................................ 1

Number of Adoptions ................................................................................................................ 2
Recent Trends in Number of Adoptions by Adoption Type ................................................ 2
Costs of Adoption ...................................................................................................................... 3
The Adoption Tax Credit ................................................................................................................. 4
Eligibility Requirements ........................................................................................................... 4
Eligible Child ...................................................................................................................... 4
Qualifying Expenses ........................................................................................................... 4
Filing Requirements to Claim the Credit ............................................................................ 5
Timing of When Qualifying Expenses Can Be Claimed for Domestic vs.
International Adoptions.................................................................................................... 6
Calculating the Credit ............................................................................................................... 7
Income Limitation ............................................................................................................... 7
Nonrefundability/Carryforward .......................................................................................... 8
Rules for Special Needs Children ............................................................................................. 8
Data on the Adoption Tax Credit ............................................................................................... 9
The Exclusion for Employer-Provided Adoption Assistance ........................................................ 12
Legislative History of the Credit and Exclusion ........................................................................... 13
The Small Business and Job Protection Act of 1996 (P.L. 104-188) ................................ 13
The Economic Growth and Tax Relief Reconciliation Act of 2001 (P.L. 107-16) ........... 15
The Patient Protection and Affordable Care Act (P.L. 111-148) ....................................... 15
The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act
of 2010 (P.L. 111-312) ................................................................................................... 16
The American Taxpayer Relief Act of 2012 (P.L. 112-240) ............................................. 16
Policy Considerations .................................................................................................................... 16
Do Adoption Tax Benefits Encourage Adoption? ................................................................... 16
Who Benefits from Adoption Tax Incentives? ........................................................................ 17
Challenges with Administering Adoption Tax Benefits .......................................................... 18
Policy Options ............................................................................................................................... 18
Replace the Current Tax Benefits with a Direct Spending Program ....................................... 19
Make the Credit and Exclusion More Generous ..................................................................... 19
Make the Credit Refundable ................................................................................................... 19
Provide Parity Between Different Types of Adoptions for the Credit and Exclusion ............. 22
Allow Adoptive Parents to Submit a Third-Party Affidavit to Verify an Adoption ................. 22
Convert the Exclusion for Employer-Provided Adoption Assistance into a Deduction .......... 23

Figures
Figure 1. Number of Adoptions by Adoption Type, 2001-2018 ...................................................... 3
Figure 2. Average Adoption Credit Amount and Number of Taxpayers Receiving the
Adoption Tax Credit, 1997-2018 ................................................................................................ 10
Figure 3. Total Dollar Amount of Adoption Tax Credits Claimed, 1997-2018 ............................. 22

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Tables
Table 1. When Expenses Can Be Used to Claim the Adoption Tax Credit for Domestic
and International Adoptions ......................................................................................................... 6
Table 2. Number of Taxpayers Claiming the Adoption Tax Credit and Total and Average
Credit Amount, by AGI, 2018 ...................................................................................................... 9
Table 3. Distribution of Adoption Tax Credit Dollars by Adjusted Gross Income (AGI)
2011 and 2018 ............................................................................................................................ 20

Table A-1. Calculating the Adoption Tax Credit for $20,000 of Adoption Expenses ................... 24

Appendixes
Appendix A. Timing Rules and Carryforwards of the Adoption Credit ........................................ 24

Contacts
Author Information ........................................................................................................................ 25


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Adoption Tax Benefits: An Overview

Introduction
The federal government supports adoption in two primary ways: federal grants to state
governments and tax benefits for individual
taxpayers that help offset the costs of adopting
Did P.L. 115-97 Modify
a child.3 This report focuses on federal
Adoption Tax Benefits?
adoption tax benefits, which consist of an
At the end of 2017, President Trump signed into law
adoption tax credit and an income tax
P.L. 115-97,1 which made numerous changes to the
exclusion for employer-provided adoption
federal income tax for individuals and businesses.2
However, the final law did not make any changes to
assistance.
either the adoption tax credit or the exclusion for
This report provides an in-depth overview of
employer-sponsored adoption assistance.
these tax benefits. It is structured to first
Nonetheless, the changes in the law could indirectly
impact the value of these benefits for certain taxpayers.
provide a brief summary of adoption in the
For example, insofar as the law lowers a taxpayer’s
United States, including the number of
income tax liability, the taxpayer may also receive a
adoptions and the average cost of adoption.
smaller adoption tax credit in a given year since as a
The report then turns to a detailed description
nonrefundable credit the final value cannot exceed
of the adoption tax credit and the exclusion for
income tax liability.
employer-provided adoption assistance,
including a summary of administrative data on the adoption credit (similar data on the exclusion
are unavailable). Next, the report summarizes the legislative history of these tax benefits. Finally,
the report concludes with a discussion and analysis of potential policy options related to these
benefits.
Brief Overview of Adoption in the United States
Adoption is a social and legal process in which an adult is formally made the parent of another
individual (usually a child). The legal process in adoption generally requires that a court
terminate the parental rights and responsibilities of birth parents (or earlier adoptive parents) and
subsequently grant those rights and responsibilities instead to the adoptive parents.
For the purposes of understanding adoption tax benefits, adoption can be categorized in one of
three ways:
1. Domestic public agency adoption: An adoption facilitated with the involvement
of a state child welfare agency.4 (Note that most domestic public adoptions are
special needs adoptions, discussed subsequently.)

1 The original title of the law, the Tax Cuts and Jobs Act, was stricken before final passage because it violated what is
known as the Byrd rule, a procedural rule that can be raised in the Senate when bills, like the tax bill, are considered
under the process of reconciliation. The actual title of the law is “To provide for reconciliation pursuant to titles II and
V of the concurrent resolution on the budget for fiscal year 2018.” For more information on the Byrd rule, see CRS
Report RL30862, The Budget Reconciliation Process: The Senate’s “Byrd Rule”, by Bill Heniff Jr.
2 For more information on the changes made to the tax code by P.L. 115-97 see CRS Report R45092, The 2017 Tax
Revision (P.L. 115-97): Comparison to 2017 Tax Law
, coordinated by Molly F. Sherlock and Donald J. Marples.
3 For information about other federal programs that support adoption, see discussion of “Adoption Assistance” (Title
IV-E of the Social Security Act), “Adoption Incentives,” and “Adoption Opportunities” in CRS Report R43458, Child
Welfare: An Overview of Federal Programs and Their Current Funding
, by Emilie Stoltzfus.
4 The Department of Health and Human Services (HHS) compiles state data on children adopted with the involvement
of state child welfare agencies every year.
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2. Domestic private adoption: An adoption facilitated by a private agency, adoption
facilitator, or attorney.5
3. International adoption:6 An adoption of a noncitizen or nonresident child by
families who are citizens or legal residents of the United States.7
Number of Adoptions
The most current data on all adoptions available from the Department of Health and Human
Services are from 2012. In 2012, of all adoptions, 44% were domestic public agency adoptions,
49% were domestic private adoptions (including stepchild adoptions), and 7% were international
adoptions.8 These same data indicate that 49 per 100,000 adults became adoptive parents in
2012.9 Overall, the total number of adoptions has fallen between 2001 and 2012 as illustrated in
Figure 1, largely driven by a steep decline in international adoptions over this time period.
Recent Trends in Number of Adoptions by Adoption Type
More recent data through 2018 are available for two types of adoptions—domestic public
adoptions
and international adoptions. However, there is no regular administrative or survey data
on domestic private adoptions.
The number of domestic public agency adoptions has fluctuated in the past decade, increasing
from about 50,000 in 2001 to 57,000 in 2009, then declining to 51,000 in 2012, before rising to
approximately 63,000 in 2018. International adoptions declined from nearly 20,000 in 2001 to
13,000 in 2009 to a little more than 4,000 in 2018. The number of domestic private adoptions fell
from about 70,000 per year in 2001 to 60,000 per year in 2012. (This figure includes stepchild
adoptions, which do not qualify for adoption tax benefits. Notably, although data on the number
of stepchild adoptions as a share of domestic private adoptions are unavailable, it is believed that
they comprise a significant proportion of this type of adoption.)10

5 Private agencies and individuals who facilitate independent domestic adoptions are not required to report data, so
comparable administrative data on domestic private adoptions are not available. However, the Department of Health
and Human Services has estimated the number of “other” adoptions—those adoptions that are neither domestic public
agency adoption nor international adoptions. These adoptions include private agency adoptions, as well as tribal
adoptions, and stepparent adoptions (stepparent adoptions do not qualify for adoption tax benefits).
6 The Internal Revenue Code (IRC) refers to international adoptions as foreign adoptions, while the State Department
refers to international adoptions as intercountry adoptions.
7 The State Department records the number of intercountry adoptions through its visa reporting system.
8 Department of Health and Human Services, Administration for Children and Families, Children’s Bureau, Child
Welfare Information Gateway, Trends in U.S. Adoptions: 2008-2012, Appendix D, E, and F, January 2016,
https://www.childwelfare.gov/pubPDFs/adopted0812.pdf.
9 Department of Health and Human Services, Administration for Children and Families, Children’s Bureau, Child
Welfare Information Gateway, Trends in U.S. Adoptions: 2008-2012, January 2016, p. 1,
https://www.childwelfare.gov/pubPDFs/adopted0812.pdf.
10 Department of Health and Human Services, Administration for Children and Families, Children’s Bureau, Child
Welfare Information Gateway, Stepparent Adoption, https://www.childwelfare.gov/pubPDFs/f_step.pdf.
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Adoption Tax Benefits: An Overview

Figure 1. Number of Adoptions by Adoption Type, 2001-2018

Source: 2001-2012 data: HHS, Child Welfare Information Gateway, Trends in U.S. Adoptions: 2008-2012,
https://www.childwelfare.gov/pubPDFs/adopted0812.pdf; 2013-2018 data on domestic public adoptions: HHS,
Administration for Children and Families, Children’s Bureau, Adoption Foster Care Analysis Reporting System
(AFCARS), FY2009-2018. Submission as of 8/22/2019, https://www.acf.hhs.gov/cb/resource/trends-in-foster-care-
and-adoption; 2013-2018 data on international adoptions: State Department, Bureau of Consular Affairs,
Intercountry Adoptions, Adoption Statistics, https://travel.state.gov/content/travel/en/Intercountry-Adoption/
adopt_ref/adoption-statistics1.html?wcmmode=disabled.
Notes: * The number of domestic private adoptions includes domestic private adoptions (facilitated by private
agencies, individuals, and attorneys), tribal adoptions, and stepparent adoptions. Stepparent adoptions do not
qualify for adoption tax benefits.
Costs of Adoption
Adoption costs vary widely, depending on the type of adoption and the particular circumstances
of each adoption. However, the Department of Health and Human Services (HHS) has estimated
cost ranges for different types of adoption as follows:
 Domestic public agency adoptions: $0 to $2,50011
 Domestic private adoptions: $15,000 to $40,00012
 International adoptions: $20,000 to $50,00013

11 Department of Health and Human Services, Administration for Children and Families, Children’s Bureau, Costs of
Adopting,
February 2011, at https://www.childwelfare.gov/pubPDFs/s_costs.pdf.
12 Department of Health and Human Services, Administration for Children and Families, Planning for Adoption:
Knowing the Costs and Resources
, Factsheet for Families, November 2016, https://www.childwelfare.gov/pubpdfs/
s_costs.pdf.
13 Department of Health and Human Services, Administration for Children and Families, Planning for Adoption:
Knowing the Costs and Resources
, Factsheet for Families, November 2016, https://www.childwelfare.gov/pubpdfs/
s_costs.pdf.
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Adoption Tax Benefits: An Overview

Actual adoption costs may be higher depending on the particular circumstances of the adoption.
The Adoption Tax Credit
The adoption tax credit helps qualifying taxpayers offset some of the costs of adopting a child.
Although the credit may be claimed for nearly all types of adoptions (excluding the adoption of a
spouse’s child), there are some special rules related to claiming the credit for international
adoptions and for adoption of children with special needs.
In 2020, taxpayers may be able to receive an adoption credit of up to $14,300 (this amount is
annually adjusted for inflation). The credit is reduced for taxpayers with income14 over $214,520
and is phased out completely for taxpayers with more than $254,520 in income (these amounts
are subject to annual inflation adjustment). The
adoption credit is not refundable.15 However,
What Is the Difference Between a
the credit may be carried forward and claimed
Credit and an Exclusion?
on future tax returns for up to five years after
A credit—like the adoption tax credit—reduces tax
initially claimed. The eligibility rules and
liability dol ar for dol ar of the value of the credit. So
calculation of the credit are described in detail
a taxpayer with a $5,000 tax liability and a $1,000
credit would have a net tax liability of $4,000.
below.
An exclusion—like the exclusion for employer-
provided adoption assistance—reduces the amount
Eligibility Requirements
of income subject to tax. So if the taxpayer earns
$100,000, but $10,000 of it is excluded from income,
Before calculating the credit the taxpayer can
for the purposes of taxation, their income is $90,000.
claim for a given year, the taxpayer must
The amount by which an exclusion reduces taxes
determine whether the child being adopted (or
owed is proportional to the taxpayer’s top marginal
tax rate. If they exclude $1,000 and are in the 10%
in the process of being adopted) is eligible, and
bracket, the exclusion reduces tax liability by $100,
the amount of qualifying expenses to which the
while if the taxpayer is in the 35% bracket, their tax
credit can be applied.
liability falls by $350.
Eligible Child
A taxpayer can only claim expenses related to the adoption of an eligible child.16 The term
eligible child refers to children under age 18 and to older individuals who are physically or
mentally incapable of taking care of themselves.17
Qualifying Expenses
Qualifying expenses must be directly related to the adoption of an eligible child. They include18
 reasonable and necessary adoption fees,
 court costs,

14 Income for the purposes of the phase out of the adoption tax credit is defined as adjusted gross income (AGI) without
regard to IRC §911, §931, and §933.
15 The adoption tax credit can offset the alternative minimum tax (AMT). For more information about the AMT, see
CRS Report R44494, The Alternative Minimum Tax for Individuals: In Brief, by Donald J. Marples.
16 Internal Revenue Code (IRC) §23(d)(1)(A).
17 IRC §23(d)(2).
18 Internal Revenue Service, “Cumulative Bulletin Notice 97-9,” December 31, 1996.
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Adoption Tax Benefits: An Overview

 attorney fees,
 travelling expenses while away from home (including amounts spent on meals
and lodging), and
 other expenses directly related to and for the principal purposes of the legal
adoption of an eligible child by the taxpayer (e.g., home study costs).19
Qualified adoption expenses do not
Adoption of a Spouse’s vs. Domestic Partner’s
include
Child and Eligibility for Adoption Tax Benefits
 any expense for which a
Under current law, qualifying adoption expenses do not include
deduction or credit is
expenses connected to the adoption of the child of the taxpayer’s
spouse.
allowed under any other
provision of the tax code;
Because the statute expressly refers to the taxpayer’s “spouse,” it

appears the provision does not apply to domestic partners who
 funds for adoption expenses
adopt their partner’s child. Such individuals are not legally married
that are received under any
and therefore are not “spouses” for purposes of federal tax law. As
federal, state, or local
such, it appears registered domestic partners can count the
expenses of adopting their partner’s child, assuming such adoption
program;
is legal under state law.
 expenses incurred to carry
out any surrogate parenting arrangement;
 expenses incurred in connection with adopting a spouse’s child (i.e., a stepchild);
or
 adoption expenses reimbursed under an employer program.
Taxpayers cannot claim a credit for expenses that violate federal or state law, are incurred in
carrying out any surrogate parenting agreement, or are for the adoption of a child who is the child
of the taxpayer’s spouse, though they may be able to claim expenses for the adoption of a child of
a domestic partner (see shaded textbox).20
Filing Requirements to Claim the Credit
To claim the adoption tax credit, a taxpayer must file IRS Form 8839 and include the name of the
adopted child (if known), their age, and the child’s taxpayer identification number (TIN). In most
cases, the child’s TIN is their Social Security number (SSN). However, in cases where the
adopting parents do not have or cannot obtain the child’s Social Security number, they may be
able to use an adoption taxpayer identification number or ATIN.21 If the child’s name, age, and
TIN are not provided, the IRS may disallow the credit until additional information about the
adopted child is provided by the taxpayer.
In addition, a married couple generally must file a joint tax return to claim the adoption tax
credit.22 If two taxpayers who are registered domestic partners adopt a child together, they may

19 See IRS Tax Topics 607-Adoption Credit and Adoption Assistance Programs, at https://www.irs.gov/taxtopics/
tc607.html.
20 IRC §23(d)(1)(B) and IRC §23(d)(1)(C); IRS Tax Topics 607-Adoption Credit and Adoption Assistance Programs,
at https://www.irs.gov/taxtopics/tc607.html.
21 For more information on the adoption taxpayer identification number (ATIN), see “Adoption Taxpayer Identification
Number” at https://www.irs.gov/individuals/adoption-taxpayer-identification-number.
22 IRC §23(f)(1). If a married person has been living apart from his or her spouse for the last six months of the year, the
child lived in the person’s home for more than six months of the year, and the person has paid more than one-half of the
cost of his or her home, then the married person may claim the adoption tax credit with a married filing separate status.
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split the qualified expenses and the resulting credit by mutual agreement, but the total amount of
the credit that can be claimed for a given adopted child is still subject to the same limit ($14,300
in 2020).23
Timing of When Qualifying Expenses Can Be Claimed for Domestic vs.
International Adoptions

For domestic adoptions that are not yet finalized, taxpayers may claim qualifying expenses for the
credit in the year following the year the expense is paid. This means that the taxpayer may claim
the adoption tax credit for expenses paid even if a domestic adoption is never finalized.24
Expenses paid in the year an adoption is finalized can be claimed on that year’s tax return.
Expenses paid after an adoption is finalized can be claimed the year the payment is made.
In contrast, as illustrated in Table 1, some of these timing rules differ for adoptions of foreign
children.25 Specifically, for adoptions of foreign children, any expenses paid before the adoption
is finalized can only be claimed in the year the adoption is finalized. If an international adoption
is never finalized, the taxpayer cannot apply any expenses connected to that adoption attempt
toward the credit. As with domestic adoptions, expenses incurred after an international adoption
is finalized can be claimed the year they are paid.
Table 1. When Expenses Can Be Used to Claim the Adoption Tax Credit for
Domestic and International Adoptions

When Taxpayer May Apply Expenses Toward the Credit
When Qualified Expenses
Are Paid
Domestic Adoptions
International Adoptions
Any year before the adoption is
The year after the year of payment Year adoption is finalized
finalized
(So expenses incurred in 2020 would
(So if the adoption was finalized in 2020,
be used to claim the credit on a 2021 expenses incurred before 2020 could be used
tax year return.)

to claim the credit on a 2020 tax return.) If an
international adoption is never finalized, the
taxpayer cannot apply any expenses connected
to that adoption attempt toward the credit.

Year adoption is finalized
Year adoption is finalized
Year adoption is finalized
Years after the year the adoption is
Year expenses are paid
Year expenses are paid
finalized
Source: IRC Section 23(a)(2) and IRC Section 23(e).

23 Internal Revenue Service, “Answers to Frequently Asked Questions for Registered Domestic Partners and
Individuals in Civil Unions,” June 20, 2016, at http://www.irs.gov/uac/Answers-to-Frequently-Asked-Questions-for-
Registered-Domestic-Partners-and-Individuals-in-Civil-Unions.
24 According to the IRS, the per adoption dollar limitation of the adoption credit requires the taxpayer to combine the
qualified adoption expenses if the taxpayer made more than one attempt to adopt an eligible child. For example, if a
taxpayer planned to adopt one U.S. child and paid $10,000 and that attempt failed, and then the taxpayer then paid
$6,000 to adopt a different child and that adoption succeeded, the taxpayer’s $16,000 of adoption expenses would be
subject to the annual limit per child ($14,300 in 2020). See IRS Notice 2010-66, https://www.irs.gov/pub/irs-drop/n-10-
66.pdf; IRS Notice 97-9, https://www.irs.gov/pub/irs-irbs/irb97-02.pdf.
25 An international adoption for the purposes of the adoption tax credit is defined as the adoption of a child who is not a
citizen or resident of the United States. For the purposes of the adoption tax credit, the “United States” includes the
U.S. possessions. See Internal Revenue Code 217(h)(3).
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Adoption Tax Benefits: An Overview

Calculating the Credit
In 2020, the maximum amount of the credit is $14,300 per child. The maximum adoption tax
credit that can be claimed in a given year, per eligible child, is equal to the lesser of (1) qualifying
adoption expenses that can be claimed in that year (see the discussion of timing in the preceding
section) or (2) the maximum statutory amount of the credit per child. The maximum statutory
amount is annually adjusted for inflation. If the child is a special needs child, the credit amount is
always the maximum statutory amount per child, irrespective of the actual expenses incurred.
(The definition of a “special needs” adoption is discussed subsequently.) The maximum
aggregate amount of the adoption tax credit that the taxpayer can claim on their tax return equals
the sum of the credit amounts for each eligible child.26
The maximum amount of the credit a taxpayer can claim in a given year may differ from the
actual amount the taxpayer does claim in that year for two reasons:
1. Income Limitation: The maximum credit amount per adopted child (i.e.,
$14,300 in 2020) is reduced because the taxpayer’s income is above the statutory
income limitation (i.e., the maximum credit amount is phased down).
2. Nonrefundability/Carryforward: The taxpayer’s tax liability is smaller than the
amount of the credit the taxpayer can claim in a given year. Since the credit is
nonrefundable, the amount of the credit actually claimed in a given year by
definition cannot be greater than taxes owed. Hence, in cases where the
calculated credit is greater than the taxpayer’s tax liability, the actual credit he or
she will be able to claim will be equal to their tax liability. For the purposes of
the adoption tax credit, the value of the credit in excess of tax liability can be
“carried forward” and claimed on future tax returns.
Theoretically, both limitations may apply to the same taxpayer. In practice, however, higher-
income taxpayers will more likely be subject to the first limitation, while lower- and middle-
income taxpayers are more likely to be subject to the second limitation. Notably, while
nonrefundability of the credit limits the amount that can be claimed in a given year, a taxpayer
may be able to recover the value of the credit on subsequent tax returns as a result of a five-year
carryforward provision. Each of these limitations is discussed subsequently.
Income Limitation
The amount of the credit which can be claimed for each eligible child is reduced if a taxpayer’s
modified adjusted gross income (MAGI) is above a phaseout threshold.27 In 2020, this phaseout
threshold equals $214,520. This threshold amount is adjusted annually for inflation. The credit
amount phases down ratably (i.e., proportionally) if a taxpayer’s income is between $214,520 and
$254,520. Hence, if a taxpayer’s income is $234,520—exactly the midpoint of the phaseout
range—the amount of the tax credit is reduced by 50%. Similarly, if the taxpayer’s income is
$224,520—one-quarter of the phase out-range—the amount of the credit is reduced by 25%.
Taxpayers with income $40,000 or more above the threshold—$254,520 in 2020—are ineligible

26 For example, if a taxpayer was eligible to claim a $5,000 adoption credit for the adoption of one child and a $10,000
adoption credit for the adoption of another child in 2020, he or she could claim a total of $15,000 of the adoption tax
credit. The maximum credit for two adopted children in 2020 would be $28,600 (2 x $14,300).
27 For the purposes of the adoption tax credit, modified adjusted gross income (MAGI) is adjusted gross income (AGI)
plus excluded foreign earned income and excluded income of bona fide residents of Guam, CNMI, American Samoa
and Puerto Rico.
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for the credit. Notably, while the phaseout threshold is adjusted annually for inflation, the
phaseout range of $40,000 is fixed and does not increase over time.
Nonrefundability/Carryforward
The adoption tax credit is a nonrefundable credit. Nonrefundable credits by definition cannot
exceed taxes owed. Absent carryforward provisions for nonrefundable credits, credits in excess of
tax liability are effectively forfeited by the taxpayer. In the case of the adoption tax credit, any
excess of the credit above tax liability can be “carried forward” on subsequent tax returns for up
to five years. In other words, depending on the amount of the tax credit the taxpayer is eligible for
and his or her tax liability, a tax credit for an adoption first claimed on a 2020 tax return can be
carried forward to a 2025 income tax return or until used, whichever comes first. While taxpayers
benefit from being able to carry forward the unused credit, there are practical complexities to
carrying a credit over several years. For example, taxpayers must keep track of when expenses
are incurred and, if they carry forward a credit, how much they have claimed in previous years for
a given adoption. The stylized example in Table A-1 in the appendix illustrates the potential
complexity of claiming the adoption tax credit using the carryforward provision.
Rules for Special Needs Children
A taxpayer claiming the credit for the adoption of a special needs child is assumed to have
incurred the maximum amount of qualifying expenses, regardless of the actual expenses incurred.
A special needs child for the purposes of the adoption tax credit (and exclusion) does not
necessarily mean the child has a medical condition or a disability. Instead, for the purposes of
these tax benefits, special needs adoptions are the adoptions of children whom the state child
welfare agency considers difficult to place for adoption. (The definition of “special needs” for
purposes of adoption tax benefits is largely the same as “special needs” for purposes of the
federal adoption assistance program that is included in Title IV-E of the Social Security Act.)28
Most foster care adoptions (i.e., domestic public adoptions)—81.3%—are special needs
adoptions, but few other adoptions are special needs adoptions.29 Specifically, a child is
considered to have special needs if the child’s state of residence determines that
 the child cannot or should not be returned to the birth parents’ home;
 there is a specific factor or condition (e.g., age of child; child is member of
sibling group seeking adoption together; child has medical, physical, or social-
emotional disability; or child is member of a minority race/ethnicity)30 that leads
to the reasonable conclusion that the child will not be adopted without assistance
provided to the adoptive parents; and

28 The definition of “special needs” for the federal adoption assistance program can be found in Sec. 473(c) [42 U.S.C.
673(c)] of the Social Security Act. Title IV-E adoption assistance is primarily an ongoing monthly subsidy paid to
adoptive families on behalf of special needs adoptive children. For more information, see CRS Report R43458, Child
Welfare: An Overview of Federal Programs and Their Current Funding
, by Emilie Stoltzfus.
29 The most recent available data is from 2014. U.S. Department of Health and Human Services, Child is Identified as a
Special Needs Adoption: October 1, 2013 to September 30, 2014 (FY2014)
, Administration for Children and Families,
Administration on Children, Youth, and Families, Children’s Bureau, http://www.acf.hhs.gov/sites/default/files/cb/
special_needs2014.pdf.
30 States are allowed to use these or any other category to determine their own special needs factors and those factors
vary by state. Special needs conditions or factors as determined by each state can be found at
https://www.childwelfare.gov/topics/adoption/adopt-assistance/?CWIGFunctionsaction=
adoptionByState:main.getAnswersByQuestion&questionID=1.
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 the child is a citizen or legal resident of the United States. (This last rule
generally excludes any international adoptions from being considered special
needs adoptions.)
Data on the Adoption Tax Credit
As shown in Table 2, 76,126 taxpayers—0.05% of all taxpayers—received the adoption tax
credit in 2018. The average credit was more than $5,000—$5,076—which was 37% of the
maximum credit amount of $13,810 in 2018
The largest share of adoption tax credit recipients—slightly less than one-third of adoption tax
credit recipients—had adjusted gross income (AGI) between $100,000 and $200,000. Relatively
few taxpayers with AGIs of more than $200,000 received the credit as a result of the credit phase
out. (As previously discussed, in 2020 the credit amount phases down proportionally if a
taxpayer’s income is between $214,520 and $254,520.)
The greatest share of adoption tax credit dollars—more than half—were received by taxpayers
with AGI between $100,000 and $200,000. In contrast, almost no taxpayers with AGI under
$30,000 received the credit. This likely reflects the nonrefundability of the credit, which results in
taxpayers with little to no tax liability receiving little if any amount of the credit.
Table 2. Number of Taxpayers Claiming the Adoption Tax Credit and Total and
Average Credit Amount, by AGI, 2018


Tax Returns with the Adoption Credit
Number
Share of
of
Returns
Total
Average
Returns
With
Credit
Share of
Credit
Adjusted Gross
Share of All
with
Tax
Dollars
Credit
Amount per
Income
Tax Returns
Credit
Credit
(millions $)
Dollars
Return
Under $30k
39.9%
1,304
1.7%
$0.6
0.1%
$422
$30k to under $50k
17.9%
5,995
7.9%
$7.3
1.9%
$1,224
$50k to under $75k
14.0%
26,074
34.3%
$63.7
16.5%
$2,444
$75k to under $100k
8.9%
12,089
15.9%
$59.1
15.3%
$4,891
$100k to under $200k
13.8%
28,863
37.9%
$234.1
60.6%
$8,112
$200k and over
5.6%
1,801
2.4%
$21.5
5.6%
$11,950
Total
100%
76,126
100%
$386.4
100%
$5,076
Source: Internal Revenue Service, Statistics of Income, Table 3.3.
Note: Items may not sum due to rounding.
As illustrated in Figure 2, the number of taxpayers receiving the adoption tax credit each year
generally increased between 1997 (when the credit was first in effect) and 2010, then decreased in
2011 and 2012, increased again in 2013 and 2014, fell again in 2015, then increased in 2016 and
2017, and fell in 2018.

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Figure 2. Average Adoption Credit Amount and Number of Taxpayers Receiving the
Adoption Tax Credit, 1997-2018

Sources: Internal Revenue Service, Statistics of Income, Individual Complete Report (Publication 1304), Table A
and Table 3.3, and IRS Form 8839.
Note: Dol ars are nominal dol ars.
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From 1997 to 2001, the average credit amount per taxpayer was roughly $2,000. This amount
roughly doubled between 2002 and 2009 to about $4,000 and then grew significantly to over
$11,000 between 2010 and 2011, subsequently falling again to an average of approximately
$4,000 to $5,000 between 2012 and 2018.
The trends in adoption tax credit receipt and the average credit amount per taxpayer illustrated in
Figure 2 may have occurred for a variety of reasons. For example, these trends may be partly
explained by legislative changes made to the credit. Some of the increase in the number of
recipients (and the average amount of the credit) between 2002 and 2009 in comparison to the
period between 1997 and 2001 may be the result of legislative expansions of the credit. Under the
Economic Growth and Tax Relief Reconciliation Act (EGTRRA; P.L. 107-16), the maximum
amount of the credit was effectively doubled and the income level at which the credit phased out
was also increased. The expanded phaseout range may have resulted in a larger average credit as
well as more upper-income taxpayers being eligible to receive the credit.
Some trends—like the decline in the number of taxpayers receiving the credit between 2006 and
2009—may also be explained by the decline in adoptions, especially of foreign children. Some
data suggest that families that adopt foreign children are more likely to claim the adoption tax
credit—and claim more dollars of the credit—than families that pursue other types of adoption,
especially domestic public adoptions.31 Hence, the steep decline in international adoptions (see
Figure 1), especially between 2006 and 2009, may have resulted in fewer taxpayers receiving the
adoption tax credit in those years.
Some of the trends may also be a result of the “carryforward provision” of the credit. Up until
2010, the adoption tax credit was nonrefundable, but taxpayers could “carry forward” any unused
credit for up to five years after initially claiming the credit. For example, if a taxpayer was
eligible for a $12,000 adoption credit, but their tax liability was $2,000 every year, the taxpayer
would receive $2,000 of the adoption credit initially and carry forward the remainder every year
for five years. Indeed, as indicated in Figure 2, up until 2010, taxpayers received on average less
than half of the maximum value of the credit. If these taxpayers were eligible for the maximum
amount of the credit, they would need to carry forward the tax credit to future tax returns to
receive the entire value of the credit. This may have resulted in the number of returns receiving
the adoption credit steadily increasing until 2010: every year taxpayers who received the adoption
tax credit would include first-time recipients as well as recipients for previous years.
When the credit was made refundable in 2010, taxpayers could the receive entire amount of their
2010 credit and any carryover credit they had from previous years, virtually eliminating credits
carried forward to 2011. This may explain the steep drop in the number of recipients in 2011, as
compared to 2010, illustrated in Figure 2. Indeed, the number of taxpayers receiving the adoption
credit appears to be more closely linked with the structure of the credit than the actual number of
adoptions. For example, between 2000 and 2006, the number of taxpayers receiving the adoption
tax credit steadily rose as illustrated in Figure 2, while the actual number of adoptions fell over
the same time period, as illustrated in Figure 1. In 2011, while the number of taxpayers receiving
the credit fell, the average amount of the credit was close to the statutory maximum, as illustrated
in Figure 2. This may indicate that, on average, recipients of the credit had adoption expenses
close to the annual maximum. After the credit became nonrefundable again in 2012, the number
of recipients of the credit began to increase, even though there is no evidence that the number of
adoptions increased.

31 Rob Geen, The Adoption Tax Credit: Is it an Effective Approach to Promote Foster Care Adoption? Child Trends,
Research Brief, August 2007, http://www.childtrends.org/wp-content/uploads/2013/02/Child_Trends-
2007_08_07_RB_AdoptionTaxCredit.pdf.
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The Exclusion for Employer-Provided Adoption
Assistance
Taxpayers whose employers offer qualifying adoption assistance programs as a fringe benefit
may not have to pay income taxes on some or all of the value of this benefit.32 The maximum
amount that can be excluded from the taxpayer’s income is capped at a maximum amount per
adoption which is the same maximum amount of the credit: $14,300 in 2020.
Since the exclusion reduces income subject to taxation, it reduces taxes in proportion to the
taxpayer’s tax bracket. For example, if a taxpayer receives $2,000 of excludible employer-
provided adoption assistance and is in the 10% tax bracket, the exclusion results in $200 of
avoided income taxes. If a taxpayer is in the 35% tax bracket, the same $2,000 exclusion is worth
$700 in tax savings. (By contrast, the tax credit reduces tax liability dollar for dollar of the value
of the credit. For example, if a taxpayer had $2,000 of qualifying adoption expenses and applied
those expenses toward the adoption credit, he or she could receive a credit of $2,000, irrespective
of the taxpayer’s tax bracket.)
Taxpayers can claim the exclusion and the credit concurrently for the same adoption, but cannot
claim both tax benefits for the same expenses. Hence, for one adoption, a taxpayer is eligible for
up to $14,300 in tax-free employer-provided adoption assistance and a $14,300 adoption credit.
(Taxpayers who claim both benefits for the same adoption must reduce the amount of qualified
adoption expenses eligible for the credit by the amount of qualified adoption expenses excluded
under an employer-provided adoption assistance plan.) Combined, the maximum value of these
two tax benefits could equal up to $19,591 in reduced tax liability per adoption in 2020
depending on a taxpayer’s expenses, income level, and availability of employer-sponsored
adoption assistance program at their work.
In addition to having the same per-adoption maximum as the adoption tax credit, the exclusion
for employer-provided adoption assistance is subject to the same income limitation (i.e.,
phaseout)33 and the same definitions of “qualified adoption expenses” and “eligible child.”
Similar rules that apply to special needs children for the credit also apply for the exclusion. In
other words, if a taxpayer adopts a child with special needs and an employer has a qualified
adoption assistance program, the taxpayer will be able to exclude up to $14,300 of income
regardless of what the actual adoption expenses are and even if the taxpayer or the employer does
not actually pay any qualified adoption expenses. The filing requirements for the exclusion are
the same as for the credit. Finally, the same timing rules that apply to the adoption credit for
domestic versus international adoption also apply to the exclusion. Thus, in order for the
employer-provided adoption benefits to be excludable from income (and hence not taxable) for an
international adoption, the amounts paid under the adoption assistance program must be paid
either during or after the year the adoption becomes final (see Table 1).
Employer-provided adoption assistance programs are a separate employee benefit that must fulfill
all of the following requirements to be excludable from an employee’s income:

32 Expenses paid or reimbursed under employer-provided adoption assistance are subject to Social Security and
Medicare taxes as well as federal unemployment insurance taxes. They are not subject to income tax withholding. For
more information see Table 2-1 at https://www.irs.gov/publications/p15b/ar02.html.
33 The definition of income used for the phaseout of the exclusion differs from the definition used when phasing out the
adoption tax credit. See IRC §23(b)(2)(B), §137(b)(3).
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1. The employer must provide notice of the plan to eligible employees.
2. The plan must not discriminate in favor of highly compensated employees.34
3. Employees must provide reasonable substantiations of qualifying expenses.
As long as these requirements are met, employers generally have discretion over other aspects of
these plans.
Administrative data from the IRS on the exclusion of employer-provided adoption assistance—
comparable to the data on the adoption tax credit—are unavailable.
Legislative History of the Credit and Exclusion
Before the enactment of the adoption tax credit and exclusion for employer-provided adoption
assistance in the mid-1990s, Congress enacted an itemized deduction for adoption expenses
associated with the adoption of a special needs child as part of the Economic Recovery Tax Act of
1981 (P.L. 97-34).35 This deduction was repealed five years later by the Tax Reform Act of 1986
(P.L. 99-514).36 The Joint Committee on Taxation provided several reasons for the repeal of this
tax benefit:
 Adoption assistance for special needs children was more appropriate through an
expenditure program.
 The itemized deduction provided its greatest benefits to higher-income taxpayers
who had less need for federal assistance for adoption.
 Agencies with expertise in adoption (i.e., not the IRS) should have budgetary
control over adoption assistance.37
However, a decade later, Congress again enacted tax incentives designed to encourage adoptions.
A summary of enacting legislation and major legislative changes is provided below. For brevity,
laws that made technical corrections or minor changes are not discussed.38
The Small Business and Job Protection Act of 1996 (P.L. 104-188)
The Small Business and Job Protection Act of 1996 (P.L. 104-188) created an adoption tax credit
and an exclusion for employer-provided adoption assistance that went into effect in 1997.
Between 1997 and 2001, the adoption credit was available to special needs and non-special needs
adoptions. As with the current credit, the amount of the credit equaled the amount of qualifying

34 In addition, the plan cannot pay more than 5% of its payments during the year for shareholders or owners (or their
spouses or dependents).
35This provision allowed taxpayers who itemized their deductions to claim a deduction of up to $1,500 for qualifying
expenses associated with the adoption of a child with special needs. At the time “a child with special needs meant a
child with respect to whom adoption assistance payments could be made under section 473 of the Social Security Act.
In general, this meant a child who (1) the State had determined cannot or should not be returned to the home of the
natural parents, and (2) could not reasonably be expected to be adopted unless adoption assistance was provide, on
account of a specific factor or condition (such as ethnic background, age, membership in a minority or sibling group,
medical condition or physical, mental, or emotion handicap).” Joint Committee on Taxation, General Explanation of
the Tax Reform Act of 198
6, JCS-10-87, May 4, 1987, pp. 52.
36 However, the 1986 law also amended Title IV-E of the Social Security Act to require states to make direct payments
to parents adopting children with special needs to help offset the nonrecurring costs of adoption (attorney fees, court
costs, etc.) and authorized 50% federal matching funds to states for these purposes. Joint Committee on Taxation,
General Explanation of the Tax Reform Act of 1986, JCS-10-87, May 4, 1987, pp. 52-53 and pp.1350-1351.
37 Joint Committee on Taxation, General Explanation of the Tax Reform Act of 1986, JCS-10-87, May 4, 1987, p. 52.
38 These include P.L. 105-34, P.L. 105-206, P.L. 107-147, P.L. 108-311, P.L. 109-58, and P.L. 109-135.
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expenses up to a maximum credit amount. Under P.L. 104-188, the maximum amount of
qualifying expenses that could be applied toward the credit was $5,000, or $6,000 for expenses
associated with the adoption of a special needs child. The credit phased out proportionally for
taxpayers with AGI between $75,000 and $115,000. (Neither the maximum amount of the credit
nor the phaseout levels were annually adjusted for inflation under this law.) Qualifying adoption
expenses, rules related to international adoptions, the five-year carryforward, the definition of a
special needs adoption, and the definition of an eligible child were effectively the same as they
are under current law. Notably, beginning in 2002, the credit would only be available for special
needs adoptions. Effectively, the $5,000 credit available for adoptions that were not special needs
adoptions was scheduled to expire at the end of 2001.
The law also enacted a temporary exclusion for employer-provided adoption assistance that went
into effect beginning in 1997. The maximum amount of the exclusion, like the credit, was limited
to $5,000, or $6,000 for special needs adoptions, and the amount that could be excluded phased
out for taxpayers with AGI between $75,000 and $115,000. (Neither the maximum amount of the
exclusion nor the phaseout levels were annually adjusted for inflation under this law.) As under
current law, many terms and definitions of the exclusion were identical to those of the credit. The
exclusion—for both non-special needs and special needs adoptions—was scheduled to expire at
the end of 2001.
Advocates for these adoption tax incentives believed that these benefits would alleviate the
financial barrier to adoption, and thus encourage more adoptions.39 In addition, it was reported at
the time when the current tax benefits were enacted, at least eight House members had adopted
one or more children and had personally experienced both the financial and bureaucratic burden
of adopting.40
Congress seemed especially concerned with encouraging adoptions of children from the U.S.
foster care system, children who for the purposes of adoption tax benefits are often categorized as
“special needs.” This may have been an important factor in creating a larger credit for special
needs adoptions. As then-Representative Cardin stated:41
It is very costly in our system to adopt children. Many parents are not able to do that
because of the costs. So the central part of this bill is to remove that financial burden, to
reduce it significantly on the outset, to make it possible for more children to be adopted.
Madam Speaker, I want to point out another feature of the bill, and that is special needs
adoptions which are much more difficult children to place, that have disabilities, that are
older, and it is more difficult to place these children in permanent adoption circumstances.
This bill recognizes that and provides additional incentives for special needs adoption.

39 One advocate, Senator Arlen Specter, cited “cost hurdles that may discourage many American families from
adopting a child” as one factor that led him to introduce legislation to “promote adoption through tax credits, to try to
encourage those who are in the situation of unintended pregnancy to carry through to term.” Senator Specter, “The
Adoption Promotion Act of 1996,” Congressional Record, April 29, 1996, p. S4325.
40 Erika Niedowski, “Adoption experience changes views. Financial, emotional costs are high, but for many it’s the
only way to build a family,” The Hill, May 15, 1996.
41 Rep. Cardin, “Adoption Promotion and Stability Act of 1996,” Congressional Record, May 9, 1996, p. H4782.
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The Economic Growth and Tax Relief Reconciliation Act of 2001 (P.L. 107-16)
The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA; P.L. 107-16)
temporarily extended and expanded the adoption tax credit and the exclusion for employer-
provided adoption assistance. Specifically, from 2002 through 2010, the law42
 extended the adoption credit for the adoption of children other than special needs
children;
 increased the maximum credit and exclusion amount from $5,000 ($6,000 for a
special needs child) to $10,000 per eligible child, including special needs
children (this amount was adjusted annually for inflation);43
 provided that for the adoption of special needs children the credit and exclusion
amount equal the maximum credit and exclusion amount ($10,000) regardless of
actual expenses (this amount was adjusted annually for inflation occurring since
2002);44 and
 increased the income level at which the credit and exclusion phased out from
$75,000 to $150,000 (these amounts were adjusted annually for inflation). Hence
the credit phased out for taxpayers with income between $150,000 and $190,000.
According to the Joint Committee on Taxation, the credit and exclusion were extended because
“Congress believed that the adoption credit and exclusion have been successful in reducing the
after-tax cost of adoption to affected taxpayers.”45 These benefits were increased because
Congress noted that many taxpayers incurred expenses above the previous maximums of $5,000
and $6,000 for special needs adoptions. Ultimately, “Congress believed that increasing the size of
both the adoption credit and exclusion and expanding the numbers of taxpayers who qualify for
the tax benefits will encourage more adoptions and allow more families to afford adoption.”46
The Patient Protection and Affordable Care Act (P.L. 111-148)
The Patient Protection and Affordable Care Act (ACA; P.L. 111-148) temporarily modified the
adoption tax credit and exclusion for 2010 and 2011. Specifically, the law made the adoption tax
credit refundable for these two years.47 The law also increased the maximum credit amount and
exclusion amount from $10,000 to $13,170 in 2010 and subsequently adjusted for inflation in
2011.

42 Notably, qualified expenses paid or incurred before 2002 remain subject to the prior-law dollar limits. Joint
Committee on Taxation, General Explanation of Tax Legislation in the 107th Congress, JCS-1-03, January 24, 2003, p.
21.
43 Inflation adjustment of the statutory dollar amounts of both the maximum credit and the income level at which the
credit phases out began in 2003.
44 This provision went into effect beginning in 2003, not 2002. See P.L. 107-16, §202(g)(2).
45 Joint Committee on Taxation, General Explanation of Tax Legislation in the 107th Congress, JCS-1-03, January 24,
2003, p. 20.
46 Joint Committee on Taxation, General Explanation of Tax Legislation in the 107th Congress, JCS-1-03, January 24,
2003, p. 20.
47 Section 23 was redesignated as Section 36C and moved to the part of the tax code that includes other refundable tax
credits.
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Senator Nelson, speaking at a news conference concerning the modifications to the adoption tax
credit included in the ACA, justified making the credit refundable as a way to encourage adoption
among lower-income Americans who might not be able to afford adoption:48
the adoption credit has been increased, and in addition to that, it’s been made as a
refundable tax credit so that lower-income people, adoption is getting more and more
expensive. It’s not like when I adopted, much more expensive. And this will mean that
lower income people would have the opportunity for adoption, as well.
The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation
Act of 2010 (P.L. 111-312)

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (P.L.
111-312) extended the EGTRRA provisions for the credit and the exclusion through 2012, but
allowed all the modifications made by the ACA to expire as scheduled at the end of 2011.
Hence the credit reverted to a $10,000 nonrefundable credit annually adjusted for inflation
occurring since 2002. The maximum amount of the exclusion also reverted to $10,000 adjusted
for inflation occurring since 2002.
The American Taxpayer Relief Act of 2012 (P.L. 112-240)
The American Taxpayer Relief Act of 2012 (ATRA; P.L. 112-240) made the EGTRRA
modifications to the credit and exclusion permanent.
Policy Considerations
There are several ways economists evaluate tax benefits, including adoption tax benefits.
Specifically, economists may assess whether adoption tax benefits encourage adoptions, the
distribution of these benefits among taxpayers, and the complexity of administering the tax
provision. These perspectives may be helpful to policymakers interested in analyzing or
modifying adoption tax benefits and are discussed subsequently.
Do Adoption Tax Benefits Encourage Adoption?
Adoption is generally viewed as beneficial to all individuals involved in the process (adopted
children, adopted parents, and birth parents) and society more broadly. Hence, many believe that
adoption should be encouraged, including through federal policies like tax benefits. There is
currently little evidence, however, that adoption tax benefits are an effective policy tool to
increase adoptions.49 Although the amount of adoption tax benefits has increased over time
(Figure 2), the actual number of children adopted has not (Figure 1). Current adoption tax
benefits may simply be too small in comparison to the actual costs of adoption to encourage
families to adopt, or a family’s decision to adopt may not be heavily influenced by financial
incentives, but instead may be influenced by more personal issues or beliefs. If adoption tax
benefits do not lead to additional adoptions, they are considered economically inefficient by

48 Betty Nguyen, Rob Marciano, and Brianna Keiler, et al., “Senate Democrats Obtain 60 Votes on Health Care
Cloture; D.C. Snow Storm One of the Worst on Record for the Area,” CNN Newsroom Transcript, December 19, 2009,
10:00 AM EST.
49 Rob Geen, The Adoption Tax Credit: Is it an Effective Approach to Promote Foster Care Adoption? Child Trends,
Research Brief, August 2007, http://www.childtrends.org/wp-content/uploads/2013/02/Child_Trends-
2007_08_07_RB_AdoptionTaxCredit.pdf.
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economists and are instead a windfall benefit to families that would have adopted even in the
absence of these benefits.
Who Benefits from Adoption Tax Incentives?
Given that there is little evidence that adoption tax benefits encourage adoption, the fairness of
these benefits may be of particular interest. As previously discussed, the vast majority of adoption
tax benefits go to upper-income Americans,50 even though data suggest that a significant number
of lower- and middle-income Americans adopt.51 In 2017, while almost half (47.2%) of adoption
tax credit claimants had income under $75,000, these taxpayers received one-fifth of adoption
credit dollars (22.1%), as illustrated in Table 2. The majority of adoption tax credit dollars
(77.9%) went to taxpayers with income of $75,000 or more, with slightly more than half (50.3%)
of adoption tax credit dollars going to those with income between $100,000 and $200,000. While
comparable data are not available for the exclusion of employer-provided adoption benefits,
exclusions generally tend to provide the largest tax savings to those paying the highest marginal
tax rates (i.e., upper-income taxpayers).
Under several economic definitions of “fairness,” adoption tax benefits would be considered
unfair (or inequitable). For example, the principle of vertical equity implies that taxpayers with
greater income, and hence more economic resources, should pay more in tax. The principal of
vertical equity underpins the progressive nature of the federal income tax code, where those with
more income pay a greater share of that income in taxes through higher tax rates. Under the
definition of vertical equity, adoption tax benefits which primarily benefit higher-income
taxpayers would lessen the progressivity of the federal income tax and hence be inequitable.
Adoption tax benefits may also be considered inequitable under the definition of “horizontal
equity.” According to the principal of horizontal equity, similar taxpayers should pay a similar
amount in taxes
. Many economists consider taxpayers to be similar if they have similar levels of
income.52 Hence, if two tax units earn $40,000 and both pay $8,000 in taxes, then the tax system

50 While beyond the scope of this report, depending on the type of adoption, some adoptive parents may be required to
have a minimum level of income to be eligible to adopt. For example, according to HHS, “Prospective adoptive parents
must be in good health and have adequate income to meet the needs of the child(ren) placed in their family. Home
ownership is not required, but a history of stable residency in a home that can accommodate, comfortably and safely,
all family members including the adopted child, is needed.” Indeed, one reason for denying an adoption is “The
applicant’s income and/or financial skills are inadequate to provide for the family.” U.S. Department of Health and
Human Services, Administration for Children & Families, Children’s Bureau, Home Study Requirements for
Prospective Parents in Domestic Adoption
, Child Welfare Information Gateway, September 2015, p. 2. Similarly,
financial considerations are taken into account in international adoptions. For example, sample wording on the “Hague
Home Study Tip Sheet for Adoption Service Providers and Prospective Adoptive Parents, stresses that prospective
parents demonstrate that they have sufficient income to care for the adopted child. See https://www.uscis.gov/files/
form/m-738.pdf.
51 While adoptive parents have a higher median income than nonadoptive parents, data indicate that adoption also
occurs among the less affluent with “over 30% of all adopted children and over 45% of the children adopted from
foster care living in households with income no higher than twice the poverty threshold.” See Table 5 in Rose M.
Kreider and Daphne A. Lofquist, Adopted Children and Stepchildren: 2010, U.S. Census Bureau, April 2014, p. 18 and
Taxpayer Advocate Service, Most Serious Problems: The IRS’s Compliance Strategy for the Expanded Adoption Credit
Has Significantly and Unnecessarily Harmed Vulnerable Taxpayers, Has Increased Costs for the IRS, and Does Not
Bode Well for Future Credit Administration
, 2012 Annual Report to Congress Volume One, December 31, 2012,
p. 112, http://www.taxpayeradvocate.irs.gov/2012-Annual-Report/downloads/Most-Serious-Problems-Adoption-
Credit-Delays.pdf.
52 A clear definition of horizontal equity—or rather of a tax that is not horizontally equitable—can be found in a report
by the Treasury Department for President Ronald Reagan, written in 1984: A tax that places significantly different
burdens on taxpayers in similar economic circumstances is not fair. For example, if two similar families have the same
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is horizontally equitable. However, adoption tax benefits (like many tax preferences) can result in
taxpayers with the same income paying different amounts in taxes, depending on their
characteristics such as whether they own a home (the mortgage interest deduction), send a child
to college (higher education tax benefits), or adopt (adoption tax benefits).
Challenges with Administering Adoption Tax Benefits
Recent evidence suggests that adoption tax benefits have been difficult for the IRS to administer
to keep both erroneous benefit claims and taxpayer burden low. In 2012—when the IRS was
processing mostly 2011 income tax returns and the adoption tax credit was refundable—they
selected 69% of returns with adoption tax credit claims for audit. In most cases, these returns
were selected because the IRS flagged the required adoption documentation as missing, invalid,
or insufficient. However, after auditing these returns the IRS “disallowed $11 million—or one
and one half percent—in adoption credit claims.”53 One reason the IRS may have flagged such a
large proportion of returns for audit—even when so few dollars of benefits were improperly
claimed—was the IRS’s lack of familiarity with adoption documentation. As the IRS Taxpayer
Advocate (TAS) remarked54
The documentation that certifies adoptions varies from state to state. A determination of
whether a child is considered to have special needs is also a state-based decision. The result
is a variety of documentation that may meet the requirements for the adoption credit. As
we have seen with the Earned Income Tax Credit (EITC), when taxpayers are required to
provide non-standardized documentation to establish eligibility, it often leads to problems
for both taxpayer and the IRS.
The recent IRS challenges with administering the refundable adoption credit highlight
fundamental challenges with having the IRS—which is focused on collecting revenue—
administer a social policy like an adoption incentive.
Policy Options
Adoption tax benefits were originally enacted to encourage more adoptions, especially of
American children in the foster care system. More recently, Congress temporarily made the credit
refundable for 2010 and 2011, expanding eligibility for the credit to lower- and middle-income
taxpayers. Congress may in the future seek further modifications to the credit or exclusion for
employer-provided adoption assistance to achieve certain policy goals. Some of these options are
discussed below.

income, they should ordinarily pay roughly the same amount of income tax, regardless of the sources or uses of that
income.” Department of the Treasury, Tax Reform for Fairness, Simplicity, And Economic Growth, The Treasury
Department Report to the President Volume 1, Washington, DC, November 1984, p. 14.
53 Taxpayer Advocate Service, Most Serious Problems: The IRS’s Compliance Strategy for the Expanded Adoption
Credit Has Significantly and Unnecessarily Harmed Vulnerable Taxpayers, Has Increase Costs for the IRS, and Does
Not Bode Well for Future Credit Administration, 2012 Annual Report to Congress Volume One, December 31, 2012,
p. 120, http://www.taxpayeradvocate.irs.gov/2012-Annual-Report/downloads/Most-Serious-Problems-Adoption-
Credit-Delays.pdf.
54 Taxpayer Advocate Service, Most Serious Problems: The IRS’s Compliance Strategy for the Expanded Adoption
Credit Has Significantly and Unnecessarily Harmed Vulnerable Taxpayers, Has Increased Costs for the IRS, and Does
Not Bode Well for Future Credit Administration, 2012 Annual Report to Congress Volume One, December 31, 2012,
p. 122, http://www.taxpayeradvocate.irs.gov/2012-Annual-Report/downloads/Most-Serious-Problems-Adoption-
Credit-Delays.pdf.
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Replace the Current Tax Benefits with a Direct Spending Program
Given that there is little evidence that adoption tax benefits increase adoptions, Congress may be
interested in eliminating these benefits and replacing them with direct spending on adoption,
especially if it views a direct spending program as more effective at encouraging adoptions.
Alternatively, Congress could eliminate adoption tax benefits and direct any additional revenue to
deficit reduction.55
Make the Credit and Exclusion More Generous
Congress could modify the benefits in a variety of ways to make them larger. For example, they
could increase the credit and exclusion percentage from 100% to 200% of qualifying expenses,
doubling the amount of the credit and exclusion. Alternatively, Congress could increase (or
eliminate) the current statutory cap on the value of the benefits ($14,300 in 2020), so that the tax
benefits were closer to the actual adoption costs. While this would increase the value of adoption
tax benefits for many taxpayers, it is still unclear if it would encourage more adoptions. While
there is some evidence that the type of adoption is influenced by cost (i.e., families may pursue a
domestic foster care adoption due to cost versus a more expensive international adoption), there is
little evidence of any effect of adoption tax benefits on the decision to adopt. In addition,
increasing the size of adoption tax benefits will increase the total cost of adoption tax benefits.
Data from the IRS indicate that on 2017 tax returns, about $404 million worth of adoption tax
credits were claimed. (Similar data for the exclusion are unavailable, although estimates from the
Tax Policy Center suggest that the cost of the exclusion is small in comparison to the credit.)56
Make the Credit Refundable
Congress could choose to make the adoption tax credit refundable, so that taxpayers with little or
no tax liability could claim the entire value of the credit in a given year. As previously discussed,
under current law, the adoption tax credit is nonrefundable, meaning the value of the credit
claimed in any year cannot exceed income taxes owed in that year. In effect, tax liability acts as a
cap on the value of a nonrefundable tax credit. However, unlike other nonrefundable credits for
individuals, the amount of the credit in excess of income taxes owed in a given year may be
carried forward and claimed for up to five years after initially claimed. The adoption tax credit
was temporarily refundable for two years—2010 and 2011—which may provide some insights
into the benefits and costs of making this credit refundable.
Policymakers interested in expanding eligibility for the adoption tax credit to low- and middle-
income taxpayers may consider making the adoption tax credit refundable. This would promote
equity among taxpayers at different income levels who are able to adopt.

55 See CRS Report R44383, Deficits, Debt, and the Economy: An Introduction, by Grant A. Driessen.
56 In analyzing U.S. Department of Treasury cost estimates of adoption tax benefits, the Tax Policy Center notes that
these cost estimates include “the value of tax-free employer adoption programs, which are likely one to two percent of
the total [cost].” Tax Policy Center, What is the adoption tax credit? Tax Policy Center Briefing Book: Key Elements
of the U.S. Tax System, http://www.taxpolicycenter.org/briefing-book/what-adoption-tax-credit.
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Table 3. Distribution of Adoption Tax Credit Dollars
by Adjusted Gross Income (AGI) 2011 and 2018

2011 (Refundable)

2018
Adjusted Gross
Refundable Nonrefundable (Nonrefundable)
Income (AGI)
Total
Portion
Portion
Total
Under $30k
24.6%
24.6%
0.0%
0.1%
$30k to under $50k
11.6%
10.9%
0.8%
1.9%
$50k to under $75k
21.3%
17.8%
3.5%
16.5%
$75k to under $100k
8.7%
4.7%
4.0%
15.3%
$100k to under $200k
33.1%
10.2%
22.9%
60.6%
$200k and over
0.5%
0.0%
0.5%
5.6%
Total
100.0%
68.3%
31.7%
100%
Source: Internal Revenue Service, Statistics of Income, Table 3.3.
Notes: The most recent year the adoption tax credit was refundable was 2011. Hence, in 2011 the taxpayer
could receive the entire value of the credit, irrespective of tax liability. In 2018, the adoption tax credit was
nonrefundable, meaning its value could not be greater than the taxpayer’s income tax liability. Any amount of the
credit in excess of tax liability in 2018 can be carried forward up to five years on future tax returns.
Making the credit refundable may also reduce taxpayers’ compliance burden in claiming the
credit and result in current claimants receiving the full value of the credit sooner, instead of
carrying the credit forward for up to five years. As previously discussed and illustrated in Figure
2
, w
hen the adoption tax credit was nonrefundable, taxpayers on average claimed significantly
less than the maximum amount of the credit. Given that adoption expenses tend to exceed the
maximum credit amount, many of these taxpayers may have carried the adoption credit forward
on subsequent tax returns. This would require diligent record keeping on the part of taxpayers
until they had claimed the total credit amount or they had exhausted the five-year time limit of the
carryforward, whichever came first. It would also mean that among those taxpayers who carried
forward the credit, there could be a significant lag between when adoption expenses were
incurred and when the credit for those expenses was actually claimed. For example, if a taxpayer
incurred $10,000 in legal expenses in 2010 for an international adoption that was finalized in
2012, they could only begin claiming the credit on their 2012 income tax return, filed in early
2013. Depending on their tax liability, they could continue to carry forward the credit for those
expenses until their 2017 tax return, a return filed generally in early 2018.
Finally, making the credit refundable could encourage the adoption of more children from the
domestic foster care system, an often-repeated goal of these tax benefits (see “Legislative History
of the Credit and Exclusion”)
. Data indicate adoptions from foster care tend to account for a
greater share of adoptions among low-income taxpayers—who would likely not be eligible for a
nonrefundable credit—than higher-income taxpayers. One study found that “foster care adoptions
accounted for about 10 percent of the adoptions completed by filers with incomes over $100,000,
compared with more than 25 percent of the adoptions completed by filers with incomes below
$50,000.”57 The same study found that foster care adoption accounted for 29% of adoptions

57 Rob Geen, The Adoption Tax Credit: Is it an Effective Approach to Promote Foster Care Adoption? Child Trends,
Research Brief, August 2007, http://www.childtrends.org/wp-content/uploads/2013/02/Child_Trends-
2007_08_07_RB_AdoptionTaxCredit.pdf.
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among taxpayers with income under $25,000, while overall foster care adoptions accounted for
18% of adoptions among all tax filers.
On the other hand, making the credit refundable could potentially increase compliance burdens on
taxpayers claiming the credit as well as pose administrative challenges to the IRS. Insofar as
policymakers remain concerned about the improper payments of refundable tax credits,58 they
may seek ways to prevent taxpayers from either mistakenly or fraudulently claiming the adoption
tax credit. Depending on the processes used to reduce improper payments, taxpayer burden could
increase, as could administrative difficulties for the IRS. For example, when the adoption tax
credit was temporarily refundable, the IRS required taxpayers claiming the credit to file a paper
return (they could previously e-file), and include both IRS Form 8839 as well as specific
adoption-related documentation, which varied based on whether the adoption was international or
domestic, final or not final, and of a child with special needs or not.
Finally, making the adoption tax credit refundable could increase the budgetary cost of the credit
if no other modifications to the credit were made (like reducing the maximum credit amount). As
illustrated in Figure 3, the total amount of the credit claimed in 2010 ($1.2 billion)—the first year
the credit was refundable—and 2011 ($610 million) was nearly four times and two times,
respectively, the average annual aggregate credit amount between 2002 and 2009 (approximately
$325 million per year). Some of the increased cost in 2010 may have been a result of taxpayers
with unused “carried forward” credit dollars claiming all of the remaining credit in 2010, as
opposed to carrying it forward after 2010.59 Taken as a whole, the 2010 and 2011 data provide
some indication as to the range of the cost of making the credit refundable with no alterations to
the formula. Policymakers could also make the credit refundable and adjust the credit formula
(and the phaseout income level) to reduce the budgetary cost of refundability.

58 Policymakers have shown interest in reducing erroneous payments of refundable credits—including the EITC, the
additional child tax credit, and the temporarily refundable adoption tax credit. For examples, see Treasury Inspector
General for Tax Administration, Improper Payments in the Administration of Refundable Tax Credits, Testimony of the
Honorable J. Russell George before the Committee on Ways and Means, Subcommittee on Oversight, U.S. House of
Representatives, May 25, 2011, https://www.treasury.gov/tigta/congress/congress_05252011.pdf; and Treasury
Inspector General for Tax Administration, Processes to Address Erroneous Adoption Credits Result in Increased
Taxpayer Burden and Credits Allowed to Nonqualifying Individuals
, June 13, 2012, https://www.treasury.gov/tigta/
auditreports/2012reports/201240065fr.pdf.
59 For example, if a taxpayer had $8,000 in carried forward credit and an average tax liability of $2,000 per year, they
could claim that entire amount $8,000 in 2010. If instead the credit were nonrefundable, they would claim a $2,000
credit every year for four years. Notably, in the second year the credit was refundable—2011—the total amount of
credit dollars claimed fell by half to $610 million in comparison to 2010. Thus, insofar as the increase in the total
dollars claimed in 2010 was a result of unused “carryforward” credits being claimed during that year, the 2011 claims
may more accurately reflect the cost of making the credit permanently refundable.
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Adoption Tax Benefits: An Overview

Figure 3. Total Dollar Amount of Adoption Tax Credits Claimed, 1997-2018

Source: Internal Revenue Service, Statistics of Income, Individual Complete Report (Publication 1304), Table A
and Table 3.3.
Note: Dol ars are nominal dol ars.
Provide Parity Between Different Types of Adoptions for the
Credit and Exclusion
As previously discussed, the legislative history indicates that Congress intended to provide the
largest tax benefits to taxpayers adopting children from the U.S. foster care system. Insofar as this
policy goal changes, Congress may modify adoption tax benefits to provide parity between
different types of adoption. For example, if Congress was interested in encouraging more
international adoptions, it could change the timing rules of international adoptions to be identical
to domestic adoptions. Currently, taxpayers who adopt a child from abroad can only claim tax
benefits once the adoption is finalized, unlike those who adopt domestically, who can claim
benefits the year after expenses are incurred (see Table 1). In addition, Congress could modify
the definition of “special needs adoption” to include children adopted through domestic private
adoption or internationally, allowing more families to claim the maximum benefit regardless of
actual expenses incurred.
Allow Adoptive Parents to Submit a Third-Party Affidavit to Verify
an Adoption
As previously discussed, when the credit became refundable, the IRS required taxpayers to file a
paper tax return with copies of adoption documentation. While this policy was intended to help
the IRS verify adoption claims, the IRS, according to the Taxpayer Advocate, seemed unfamiliar
with the enormous varieties of documentation, and flagged many returns erroneously for audit.
One potential solution that Congress may consider is allowing taxpayers to use a standard third-
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Adoption Tax Benefits: An Overview

party affidavit that allows the relevant adoption intermediary, be they a state or private agency, to
attest to the adoption. This would also provide IRS examiners with one standardized document to
verify, potentially reducing confusion among IRS examiners, and burden among taxpayers.
Convert the Exclusion for Employer-Provided Adoption Assistance
into a Deduction
The exclusion for adoption assistance is only available to taxpayers whose employers provide
adoption assistance benefits. One option to expand the availability of this benefit is to convert the
exclusion into a deduction that could be claimed regardless of whether adoption assistance was
provided as an employee benefit. For example, the exclusion could be converted to an “above-
the-line” deduction available to all taxpayers regardless of whether they itemize their deductions
or not. The same formula for the credit and income phaseouts could apply. While this policy
change might expand the availability of this benefit, it would also likely increase the cost of the
provision and complexity for taxpayers, who could now claim both a credit and deduction for
their expenses. In addition, the value of the deduction in terms of tax savings—like the
exclusion—depends on the taxpayer’s tax bracket. A $5,000 deduction (or exclusion) can save a
taxpayer up to $500 in the 10% tax bracket, but $1,750 if he or she is in the 35% bracket. In other
words, deductions and exclusions tend to provide the greatest tax savings to the highest-income
taxpayers.
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Appendix A. Timing Rules and Carryforwards of
the Adoption Credit
Below is an illustrative example of how a taxpayer who incurs $20,000 in adoption expenses
would claim the adoption tax credit using the carryforward. For simplicity, this example is a
domestic private adoption (i.e., not a special needs nor an international adoption). In addition it is
assumed that the taxpayer’s income is below the phaseout amount, so he or she can claim the
maximum credit.
Table A-1. Calculating the Adoption Tax Credit for $20,000 of Adoption Expenses
Domestic Adoption Finalized in 2018

2016
2017
2018
2019
2020
Was the adoption finalized?
No
No
Yes
NA
NA
(1) Maximum statutory credit amount
$13,460
$13,570
$13,810
$14,080
$14,300
(2) Maximum credit that can be claimed by
Credit
$13,570
$10,810
$8,080
$4,300
the taxpayer based on credits claimed in prior
cannot
($13,810
($14,080
($14,300
years
be
-$3,000)
-$3,000
-$3,000
(statutory amount – credit already claimed for the
claimed
-$3,000)
-$3,000
adoption in previous years)
this year
-$4,000)
(3) Qualifying expenses incurred during the
$5,000
$15,000
$0
$0
$0
year
(4) Expenses to claim the credit in a given



$0
$0
year
new expenses to claim the credit
$0
$5,000
$15,000
$0
$0
expenses carried forward from previous years
$0
$0
$2,000
$7,810
$3,810
total
$0
$5,000
$17,000
$7,810
$3,810
(5) Calculated amount of the credit (before
$0
$5,000
$10,810
$7,810
$3,810
tax liability)
(the lesser of the maximum credit that can be claimed by
the taxpayer (2) or the maximum expenses(4))

(6) Income Tax Liability
$3,000
$3,000
$3,000
$4,000
$4,000
(7) Amount of credit claimed
$0
$3,000
$3,000
$4,000
$3,810
(the lesser of the calculated amount of the credit (5) or
income tax liability(6))

(8) Amount of expenses that can be carried
$0
$2,000
$7,810
$3,810
$0
forward
(the difference of the amount of the credit claimed and
the calculated amount of the credit)

In 2016, the taxpayer incurs $5,000 of expenses, but since the adoption is not finalized, the credit
cannot be claimed on his or her 2016 income tax return. Instead, the taxpayer must wait to file a
2017 tax return to apply these expenses toward claiming the credit. (For domestic adoptions, if
the adoption is not yet finalized, the expenses can be applied toward claiming the adoption tax
credit the year after they are incurred.)
On a 2017 tax return, the taxpayer can apply expenses incurred in 2016 and claim up to a $5,000
tax credit for that year. However, in 2017 the taxpayer’s income tax liability is $3,000, so the
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Adoption Tax Benefits: An Overview

actual amount of the adoption tax credit the taxpayer can claim in 2017 is $3,000. The taxpayer
can carry forward the difference of $2,000.
On the taxpayer’s 2018 tax return, he or she can apply the $15,000 of expenses incurred in 2017
as well as the $2,000 in carried-forward expenses from the previous year, for a total of $17,000 of
expenses. (The $15,000 of expenses incurred in 2018 can be claimed on the taxpayer’s 2018
return because the adoption is finalized in 2018.) The maximum amount of the credit the taxpayer
can claim in 2018 is $10,810 (the statutory maximum minus the $3,000 of credit already
claimed). As a result of the $3,000 tax liability in 2018, the taxpayer will claim a $3,000 credit,
and carry forward the difference of $7,810.
On a 2019 tax return, even though the taxpayer has incurred no additional expenses, he or she can
apply the carried-forward expenses of $7,810 and continue to claim the credit. The maximum
amount of the credit that can be claimed in 2019 is $8,080 (the statutory maximum minus the
$6,000 of credit already claimed). However, in 2019 the taxpayer’s income tax liability is $4,000,
so the actual amount of the adoption tax credit the taxpayer can claim in 2019 is $4,000. The
taxpayer can carry forward the difference of $3,190.
The taxpayer can apply the carried-forward expenses of $3,810 and continue to claim the credit
on a tax return in 2020. The maximum amount of the credit that can be claimed in 2020 is $4,300
(the statutory maximum minus the $10,000 of credit already claimed). In 2020 the taxpayer’s
income tax liability is $4,000, so the actual amount of the adoption tax credit the taxpayer can
claim in 2016 is $3,810. The taxpayer has no additional carryforward.
In other words, of the $20,000 of expenses incurred, the taxpayer is eligible to claim $13,810 of
the adoption credit over four years (2017 through 2020).

Author Information

Margot L. Crandall-Hollick

Acting Section Research Manager


Acknowledgments
This report was updated in May 2020 with assistance from Joseph Hughes, Research Assistant.

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Congressional Research Service
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