Adoption Tax Credit 2017

The IRS announced the amount of the 2017 Adoption Tax Credit.

2017 Adoption Tax Credit-Non Special Needs Adoptions

The amount allowed in 2017 for the Adoption Tax Credit for non special-needs adoptions, both domestic and international, is $13,570 for “qualified adoption expenses”. The definition of what IRS considers a qualified adoption expense has not changed, and families must be able to document these expenses, if requested by the IRS. This amount is up slightly from 2016 ($13,460).

The 2017 Adoption Tax Credit begins to phase out for taxpayers with modified adjusted gross income (MAGI) more than $203,540 and completely phased out for taxpayers with MAGI of $243,540 or more.

2017 Adoption Tax Credit-Special Needs Adoptions

Families who adopt a child with special needs from US foster care are eligible to claim the Federal Adoption Tax Credit in 2017 of $13,570 whether or not they actually incurred any adoption expenses. A child is considered to have “special needs” if they receive an adoption assistance/subsidy benefits from the state.

Children adopted internationally, even if they have diagnosed special needs, are not considered as a “special needs adoption” by the IRS and parents can only claim the credit for qualified adoption expenses.

Will the Adoption Tax Credit be Refundable in 2017?

The Adoption Tax Credit for taxes filed in 2017 is not refundable. A refundable tax credit is one you get back regardless of what you owe or paid in taxes for the year. When the credit is not refundable, you receive only what you have in federal income tax liability.

The Adoption Tax Credit was only refundable for 2010 and 2011, but we have been working ever since to make it refundable again, and we can use your help! The Adoption Tax Credit Working Group has been working to protect the adoption tax credit and make it refundable. Creating a Family is a member of this group, and we report on their progress and when they need our help. You can find these updates on our Adoption in the News page.

Creating a Family Radio Show on 2017 Adoption Tax Credit

Our annual Adoption Tax Credit show has not been booked yet, but will likely happen in January 2017. As always, we will have two of the top experts on this credit to answer all your Adoption Tax Credit questions. To find out exactly when this show will air and to submit questions in advance, sign up for our weekly adoption newsletter.

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