Form 8839 helps adoptive parents claim two valuable tax benefits related to adoption: the adoption tax credit and the exclusion of employer-provided adoption benefits from income. Think of it as your ticket to recovering some of the significant costs involved in adopting a child.

For 2018, the maximum adoption credit is $13,810 per child, which can directly reduce the amount of tax you owe. If your employer provided adoption assistance benefits (like paying some of your adoption expenses), you can also exclude up to $13,810 per child from your taxable income. The good news? You can claim both benefits for the same child—potentially getting up to $27,620 in total tax relief—but you can't double-dip by claiming the same expenses twice.

The form applies whether you're adopting a child from the United States (domestic adoption) or from another country (foreign adoption), though the timing rules differ. It covers "qualified adoption expenses" including adoption fees, attorney fees, court costs, travel expenses (meals and lodging while away from home), and for foreign adoptions, re-adoption expenses in the U.S.

What Form 8839 Is For

Form 8839 helps adoptive parents claim two valuable tax benefits related to adoption: the adoption tax credit and the exclusion of employer-provided adoption benefits from income.

Benefit Amounts and Scope

• Maximum adoption credit for 2018: $13,810 per child
• Maximum exclusion of employer-provided adoption benefits for 2018: $13,810 per child
• You can claim both benefits for the same child, but cannot use the same expenses for both.

Covered Adoption Types and Expenses

• Domestic and foreign adoptions (timing rules differ)
• Qualified adoption expenses: agency/attorney fees, court costs, travel (meals & lodging while away from home), and U.S. re-adoption costs for foreign adoptions

When You’d Use Form 8839

Filing an Amended Return

If you forgot to claim the adoption credit when you originally filed, or if you made an error on your original Form 8839, you can file Form 1040-X (Amended U.S. Individual Income Tax Return) to correct it. Attach a corrected Form 8839 to your 1040-X. Generally, you have three years from the date you filed your original return to file an amendment and claim a credit you missed.

Carryforward Situations

The adoption credit can be carried forward for up to five years if you can't use it all in one year due to limited tax liability. If you have unused credit from 2018, you would continue filing Form 8839 each year through 2023 (if needed) to claim the remaining credit.

Foreign Adoption Timing

For foreign adoptions, the adoption must be final before claiming the credit. If you received employer benefits in 2017 but the adoption wasn't final until 2018, you may need to file an amended 2017 return to exclude those benefits.

Processing Time Note

The IRS typically processes amended returns within 8–12 weeks, though complex situations may take longer.

IRS Form 8839 Instructions 2018

Key Rules or Details for 2018

Maximum Amounts

• Credit and exclusion each capped at $13,810 per eligible child for 2018 (indexed annually).

Income Phase-Out

• Phase-out begins at MAGI $207,140 and ends at $247,140 or more.
• The reduction is proportional (e.g., at the midpoint, you lose about half the benefit).

Eligible Children

• Under age 18, or any age if physically/mentally incapable of self-care.
• Domestic adoptions: you can claim the credit even if the adoption never finalizes (attempted adoption).
• Foreign adoptions: adoption must be final before you can claim anything.

Timing Differences

Domestic (U.S.) Adoption

• Claim expenses paid in 2017 on your 2018 return (if adoption wasn't final in 2017).
• Claim expenses paid in 2018 on your 2018 return (if final in 2018) or your 2019 return (if not final).

Foreign Adoption

• You can only claim the credit in the year the adoption becomes final—regardless of when you paid expenses.

Special Needs Provision

• For U.S. children with special needs where the adoption finalized in 2018, you automatically get the full $13,810 credit even if you paid less (or zero) in qualified expenses. The state must officially determine special needs.

Filing Status Requirements

• File as single, head of household, qualifying widow(er), or married filing jointly.
• If married, you generally must file jointly unless you meet specific separation requirements (lived apart last six months and the child lived with you more than half the year).

Non-Refundable Credit

• The credit is non-refundable (can reduce tax to zero but not below).
• Unused amounts carry forward up to five years.

IRS Adoption Credit Information

Step-by-Step (High Level)

Part I: Preparation

Step 1: Gather Documentation

Collect adoption agency invoices, attorney bills, court filing fees, travel receipts, and any Form W-2 showing employer-provided adoption benefits (look for code “T” in box 12). For special needs adoptions, keep the state’s determination.

Part II: Complete the Form

Step 2: Part I — Information About Your Child

Fill in columns for each child: name, year of birth, disability status, special needs status, foreign adoption status, identifying number (SSN/ATIN/ITIN), and whether adoption was finalized in 2018 or earlier.

Step 3: Part III First (if Applicable) — Employer-Provided Benefits

If you received employer-provided adoption benefits, start with Part III. Enter the maximum exclusion ($13,810), subtract any prior-year exclusions for the same child, enter 2018 benefits (from your W-2), and calculate the excluded amount based on your income. Lines 17–29 include the income phase-out formula.

Step 4: Part II — Adoption Credit

Enter the maximum credit ($13,810 per child), subtract any prior-year credit for the same child, and enter qualified adoption expenses (excluding amounts reimbursed by your employer).
Line 5: for special needs adoptions finalized in 2018, enter $13,810 even if you paid less.
Apply the income phase-out on lines 7–11, add any carryforward, and determine your final credit on line 16.

Step 5: Attach to Your Tax Return

Attach Form 8839 to your Form 1040 or 1040NR.

• Enter the credit on Schedule 3 (Form 1040), line 54, check box c, and write “8839.”
• For the exclusion, adjust Form 1040, line 1 (note “AB” for adoption benefits).

Step 6: Keep Records

Maintain documentation for at least three years after filing (longer if carrying forward unused credit). The IRS may request proof of qualified expenses.

IRS Form 8839 2018 PDF

Common Mistakes and How to Avoid Them

Mistake #1: Claiming Employer-Reimbursed Expenses for the Credit

If your employer paid $5,000 of your $15,000 expenses, you can only claim a credit for the remaining $10,000.
Solution: Complete Part III first to calculate excluded benefits, then subtract this from total expenses in Part II.

Mistake #2: Wrong Timing for Foreign Adoptions

Claiming expenses before a foreign adoption is final is an error.
Solution: For foreign adoptions, ensure the adoption decree is final before claiming the credit; check column (e) in Part I.

Mistake #3: Incorrect MAGI Calculation

Using AGI instead of MAGI skews the phase-out.
Solution: Use the worksheet in the instructions (page 6) to compute MAGI (adds back items like foreign earned income exclusion and certain deductions).

Mistake #4: Missing the Special Needs Provision

Parents sometimes claim only actual expenses when entitled to the full $13,810.
Solution: For U.S. special needs adoptions finalized in 2018, enter $13,810 on line 5 (minus any amounts claimed in prior years).

Mistake #5: Forgetting to Carry Forward Unused Credit

Not tracking the unused portion wastes benefits.
Solution: Use the Adoption Credit Carryforward Worksheet and file Form 8839 each year (up to five years) to claim it.

Mistake #6: Using the Wrong Child Identification Number

Leaving the SSN/ATIN/ITIN blank or incorrect.
Solution: Apply for the appropriate ID before filing (Form SS-5, W-7A, W-7 as applicable).

Mistake #7: Combining Multiple Attempted Adoptions Incorrectly

Listing two unsuccessful attempts for the same child separately.
Solution: Combine expenses for multiple attempts to adopt the same child on a single “Child 1” line per the Attempted Adoptions instructions.

What Happens After You File

Initial Processing

The IRS typically processes returns within ~21 days for e-filed and 6–8 weeks for paper returns. The adoption credit doesn't automatically trigger extra scrutiny, though documentation may be requested.

Documentation Requests

You may receive Letter CP75 or similar requesting proof of qualified adoption expenses. You’ll typically have 30 days to respond with copies of receipts, invoices, court documents, and agency statements.

Credit Applied to Your Tax

If you have enough liability, the credit reduces your tax dollar-for-dollar. Example: $15,000 tax owed minus $13,810 credit = $1,190 remaining tax.

Unused Credit Carries Forward

If the credit exceeds your liability, the IRS tracks the unused portion. File Form 8839 in subsequent years (2019–2023 for 2018 credits) to claim it, using the Carryforward Worksheet from the prior year’s instructions.

State Tax Implications

Many states offer their own adoption credits or conform to federal rules. After filing federally, check your state tax agency for additional forms or benefits.

Future Audits

Keep records for at least three years after the last carryforward year. The IRS may request adoption decrees, agency contracts, attorney bills, and travel receipts.

Employer Benefit Reporting

If you excluded employer-provided adoption benefits, this reduces the wages shown on Form 1040, line 1. This is correct—W-2 box 1 includes the benefits, and Form 8839 removes them.

FAQs

Q1: Can I claim the adoption credit if I'm adopting my stepchild?

No. Expenses for adopting your spouse's child don't qualify for the credit or exclusion. This is specifically excluded under the definition of qualified adoption expenses in the tax code.

Q2: What if my adoption falls through—can I still claim the expenses?

Yes, for domestic (U.S.) adoptions only. If you attempted to adopt a U.S. child and the adoption failed or wasn't finalized, you can still claim the qualified expenses. For foreign adoptions, the adoption must be final before any credit is allowed, so failed foreign adoptions don't qualify.

Q3: We're a same-sex couple and each paid some expenses. How do we handle this?

If you're married filing jointly, combine expenses normally. If you're not married (or married but filing separately and meeting separation requirements), you must divide the $13,810 maximum between you as agreed, and each files a separate Form 8839 with their share.

Q4: Can I claim both the adoption credit and the Child Tax Credit for the same child?

Yes. Once your adopted child has a valid SSN and meets the Child Tax Credit requirements (under age 17, etc.), you can claim the $2,000 Child Tax Credit in addition to the adoption credit.

Q5: I adopted my child in 2018 but forgot to file Form 8839. What should I do?

File an amended return using Form 1040-X. Generally, you have three years from the date you filed your original 2018 return (likely April 15, 2019)—so until April 15, 2022 in most cases. Attach a completed Form 8839 to your 1040-X.

Q6: My MAGI is above $247,140. Can I claim anything?

No. At $247,140+ MAGI in 2018, both the adoption credit and the exclusion are eliminated. However, you may qualify in a later year if income drops and you have carryforward credit from a prior year.

Q7: How do I know if my child qualifies as "special needs"?

The state (or DC) must officially determine that (1) the child can't or shouldn't return to their parents' home, and (2) the child likely won't be adopted without assistance. Keep documentation of this determination.