The 2025 Adoption Tax Credit

Did you finalize an adoption in 2025, or within the last several years? Are you eligible to claim the Adoption Tax Credit? Listen to this conversation about the 2025 Adoption Tax Credit. Our guests are Becky Wilmoth, an Enrolled Agent and Adoption Tax Credit Specialist with Bill’s Tax Service, and Josh Kroll, the Adoption Subsidy Resource Center coordinator at Families Rising.

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In this episode, we cover:

  • What is the Adoption Tax Credit for adoption being claimed on 2025 federal taxes? $17,280 per eligible adoption
  • What is different about this year’s Adoption Tax Credit?
    • How did this change come about?
  • What is a “credit,” and how does it differ from a deduction or some other form of tax savings?
  • How would you claim the Adoption Tax Credit if you get a tax refund every year?
    • Should you still apply the credit to your federal income taxes if you don’t have any federal tax liability?
  • What types of adoptions are included or excluded in the Adoption Tax Credit?
    • Stepparent adoption?
    • Embryo adoption?
    • Same-sex partner, second-parent adoption?
    • Unmarried heterosexual second-parent adoption?
    • Surrogacy?
  • Are kinship adoptions covered? Are kinship guardianship arrangements/expenses covered?
    • What if the relative child was never involved with the foster care system?
  • Can you claim the Adoption Tax Credit for each adoption you complete, even if you completed them in the same year?
    • What about adopting siblings at the same time?
  • What is a Qualified Adoption Expense for purposes of the Adoption Tax Credit 2025?
  • When can you claim the Adoption Tax Credit for:
    • Domestic Private/Infant Adoption
    • International Adoption
    • Re-adoption in the US for International Adoption
    • Foster Care Adoption
    • Kinship Adoption
  • For purposes of filing the Adoption Tax Credit, what qualifies as a Special Needs Adoption?
  • How does the Adoption Tax Credit differ for adoptions from foster care?
    • Is it the same thing as when we think of a special needs child through international adoption?
  • What does the IRS accept as proof of “special needs” in foster adoptions?
    • What is a $0 subsidy agreement?
  • Can you reclaim your expenses for an adoption that did not result in a placement (that is, a failed adoption)? How?
  • What income level (Modified Adjusted Gross Income) is excluded from claiming the Adoption Tax Credit in 2025?
  • How long can the credit be carried over?
    • Why is this useful for families filing for the credit?
  • What if you didn’t claim the Adoption Tax Credit when eligible?
    • Is the Adoption Tax Credit something you can amend your tax return for?
    • How do you amend it, and how many years back?
  • Will the Adoption Tax Credit offset self-employment tax?
  • How does the Secure Act impact us if we are claiming the Adoption Tax Credit for 2025 taxes?
  • What should you do if the child’s Social Security Number is unavailable when you file?
    • Should you use an Adoption Taxpayer Identification Number (ATIN #) if you don’t have the child’s Social Security number?
  • How does the Adoption Tax Credit work in conjunction with employee adoption benefits?
    • For special needs (foster care) adoption?
  • If you adopt, can you still claim the Child Tax Credit?
    • What do you need to get the Child Tax Credit for your adopted child?
  • Do you need to send any documentation for the Adoption Tax Credit to the IRS when you file your taxes?
    • What type of documentation should you keep in your records? For how long?
  • How to advocate for refundability? https://adoptiontaxcredit.org

Resources:


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Music Credit: Michael Ashworth; Podcast Producer: megownsoundworks.com; Photo by Nataliya Vaitkevich: https://www.pexels.com/photo/tax-season-6863255/