Special Needs Child For Adoption Credit

You re entitled to claim the full amount of the adoption credit if you adopt a special needs child even if your out of pocket expenses are less than the tax credit amount.

Special needs child for adoption credit.

However the maximum amount will be reduced by any qualified adoption expenses you claimed for the same child in a prior year or years and the magi limitation may apply. If you adopt a child with special needs you are entitled to claim the full amount of the adoption credit even if your out of pocket expenses are less than the tax credit amount. The credit for all other adopted children is based on the family s qualified adoption expenses the website further explains that to be considered for the 2018 tax credit a child with special needs the child had to meet all three of the following characteristics. A child with special needs may come with some costs as there is still paperwork fees and a home study to complete but nearly the entire cost is refundable through the adoption tax credit or subsidized by the government.

There are two types of adoption credits. 1 general adoption credit a credit is allowed for residents adopting a child and 2 special needs kansas department for children and families custody adoption. A nonrefundable tax credit for qualified adoption expenses paid to adopt an eligible child. Example 2 a couple adopted three siblings with special needs.

31 1996 and before jan. Likewise you would be limited to a credit of 14 080 even if you spent 20 000 on qualified expenses subject to certain income phaseouts and with one exception. For a special needs adoption adoption of a child from u s. Individual income taxpayer effective for all taxable years beginning after dec.

For 2018 the credit is reduced if your modified adjusted gross income magi falls between 207 140 and 247 139. So if you finalize in january 2018 you claim the 2018 adoption tax credit when you do your taxes for 2018 typically early in 2019. The credit is eliminated if your magi is 247 140 or more. The credit may be allowed for the adoption of a child with special needs even if you do not have any qualified expenses.

Thus if the adoption of a child whom a state has determined has special needs becomes final in 2019 the maximum credit allowable generally would be 14 080. For example even if you incur no expenses to adopt a special needs child you are still entitled to the full credit amount. Foster care who receives adoption assistance benefits you claim the adoption tax credit the year it is finalized. They first use 1 200 in child tax credit then 5 800 in adoption tax credit on their 2019 taxes.