Adopting a child is one of life's most rewarding experiences, but it can also be expensive. Fortunately, the federal government offers financial relief through Form 8839, which allows adoptive parents to claim tax credits and exclude employer-provided benefits from their income. If you've adopted or are in the process of adopting a child, understanding Form 8839 can help you maximize your tax savings. This guide breaks down everything you need to know about the 2022 version of this important form in plain English.

What Form 8839 Is For

Form 8839 serves two primary purposes: calculating the Adoption Tax Credit and determining the Exclusion for Employer-Provided Adoption Benefits. Both benefits can significantly reduce your tax burden when you adopt an eligible child.

The Adoption Tax Credit

The Adoption Tax Credit is a nonrefundable credit that directly reduces the amount of federal income tax you owe. For 2022, you can claim up to $14,890 per child for qualified adoption expenses. This means if you owe $10,000 in taxes and have a $14,890 credit, your tax bill drops to zero. Any unused credit can be carried forward for up to five years.

Exclusion for Employer-Provided Adoption Benefits

The exclusion allows you to remove employer-provided adoption benefits from your taxable income. If your employer reimburses you for adoption expenses or pays them directly under a qualified adoption assistance program, you can exclude up to $14,890 per child from your income. The key advantage? You can claim both the credit and the exclusion for the same adoption—just not for the same expenses. For instance, if you paid $20,000 in adoption costs and your employer reimbursed $8,000, you could exclude the $8,000 from income and claim a credit on the remaining $12,000.

Eligible Child and Adoption Types

An eligible child must be under 18 years old or physically/mentally incapable of self-care. The form applies to domestic adoptions (U.S. citizens or residents), foreign adoptions, and adoptions from public foster care systems. Importantly, you cannot use Form 8839 for adopting your spouse's child or for surrogate parenting arrangements.

IRS Form 8839 Instructions

When You’d Use Form 8839 (Including Late or Amended Returns)

You'll file Form 8839 with your regular tax return for any year you paid qualified adoption expenses or received employer adoption benefits. The timing depends on whether you're adopting a U.S. child or a foreign child:

Timing for U.S. (Domestic) Adoptions

For U.S. (domestic) adoptions, you claim expenses in the year after you pay them if the adoption isn't final yet. If the adoption becomes final during the year, you claim expenses in that same year. Even if an adoption attempt is unsuccessful, you can still claim the credit for expenses paid.

Timing for Foreign Adoptions

For foreign adoptions, you must wait until the adoption is final to claim any expenses. Once finalized, you can claim all qualified expenses paid in that year and all prior years combined.

Late or Amended Returns

You would file Form 8839 late or on an amended return (Form 1040-X) if you:

• Forgot to claim the credit or exclusion on your original return
• Made errors in calculating your credit or exclusion amounts
• Received additional documentation (like a special needs determination) after filing
• Need to change your filing status to married filing jointly to claim the credit
• Discovered you're eligible for carryforward credits from prior years

Amended returns generally must be filed within three years of your original filing deadline. The IRS typically processes amended returns within 8-12 weeks, though it can take longer. You can check the status of your amended return about three weeks after submission.

IRS Adoption Credit Information

Key Rules or Details for 2022

Understanding the 2022 limits and qualifications is crucial for maximizing your benefits:

Maximum Amounts

Maximum Amounts: Both the credit and exclusion are capped at $14,890 per eligible child in 2022. This is a per-adoption limit, not an annual limit. If you claimed $5,000 for a child in 2021, you can only claim up to $9,890 more for that same child in 2022.

Income Phaseout

Income Phaseout: Your benefits begin to phase out when your Modified Adjusted Gross Income (MAGI) exceeds $223,410. The credit and exclusion are completely eliminated at $263,410 or more. MAGI is generally your adjusted gross income plus certain exclusions like foreign earned income.

Qualified Expenses

Qualified Expenses include:

• Adoption fees and agency charges
• Attorney and court costs
• Travel expenses, including meals and lodging while away from home
• Re-adoption expenses for foreign children adopted in their home country

Non-Qualifying Expenses

Expenses that DON'T qualify:

• Expenses covered by government programs or grants
• Employer reimbursements (these are handled through the exclusion)
• Expenses for surrogate parenting
• Expenses that violate state or federal law
• Expenses for adopting your spouse's child
• Expenses claimed under another tax provision

Special Needs Exception

Special Needs Exception: If you adopt a U.S. child with special needs (as determined by a state agency), you can claim the full $14,890 credit even if you paid less or nothing in expenses. The state must officially determine that the child cannot return to their parents' home and is unlikely to be adopted without assistance due to factors like age, ethnicity, sibling group membership, or medical/emotional conditions.

Filing Status

Filing Status: You generally must be married filing jointly to claim the credit or exclusion. Single, head of household, or qualifying surviving spouse filers can also claim it. Married filing separately is allowed only in limited circumstances when spouses live apart for the last six months of the year and meet specific requirements.

Credit Carryforward

Credit Carryforward: The Adoption Credit is nonrefundable, meaning it can only reduce your tax to zero, not generate a refund. However, any unused credit can be carried forward for up to five years or until fully used, whichever comes first.

2022 Form 8839 Instructions PDF

Step-by-Step (High Level)

Form 8839 has three main parts, and you must complete Part III before Part II if you have employer-provided benefits:

Part I – Information About Your Eligible Child or Children

Start by providing details about each child you're adopting. You'll need to enter:

• The child's name
• Year of birth
• Whether the child has special needs (check the box if a state has made this determination)
• Whether it's a foreign adoption
• The child's Social Security Number, Adoption Taxpayer Identification Number (ATIN), or Individual Taxpayer Identification Number (ITIN)
• Whether the adoption became final during 2022 or earlier

If you're adopting more than three children, you'll need to attach additional Forms 8839. For multiple unsuccessful attempts to adopt the same child, combine those expenses on one line rather than reporting each attempt separately.

Part III – Employer-Provided Adoption Benefits (Complete This First)

If your employer provided adoption benefits, complete Part III before Part II:

• Enter the maximum exclusion amount ($14,890 per child)
• Subtract any prior-year benefits you excluded for the same child
• Enter the total employer benefits you received in 2022 (found in Box 12 of your W-2 with code T)
• Calculate your Modified Adjusted Gross Income
• Use the worksheet to determine your allowable exclusion after applying the income phaseout

The amount you can exclude reduces your taxable income on your Form 1040, line 1f.

Part II – Adoption Credit

Now calculate your credit:

• Enter the maximum credit amount ($14,890 per child)
• Subtract any credit amounts claimed for the same child in prior years
• Enter your qualified adoption expenses for 2022 (not including employer-reimbursed amounts)
• For special needs adoptions, enter $14,890 minus any prior year credits, even if you paid less
• Calculate your MAGI and apply the phaseout formula if your income exceeds $223,410
• Complete the Credit Limit Worksheet to determine how much credit you can use this year
• If you have more credit than you can use, calculate your carryforward to 2023 and future years

The credit goes on Schedule 3 (Form 1040), line 6c, and flows to your main Form 1040.

Common Mistakes and How to Avoid Them

Many taxpayers make preventable errors when completing Form 8839. Here are the most frequent mistakes:

Mistake #1: Claiming employer-reimbursed expenses as credits

If your employer paid $10,000 toward your adoption and you exclude that amount from income, you cannot also claim a credit on those same $10,000. Only expenses you personally paid out-of-pocket (after employer reimbursement) qualify for the credit.

How to avoid: Complete Part III first, then subtract employer benefits from your total expenses in Part II.

Mistake #2: Claiming expenses covered by grants or government programs

Adoption subsidies, state assistance, or federal grants don't count as qualified expenses for the credit.

How to avoid: Only include expenses you paid from personal funds. Keep detailed records showing which expenses were covered by which sources.

Mistake #3: Forgetting to get the child's identification number

You need an SSN, ATIN, or ITIN for the child. If you file without one, your credit will likely be denied.

How to avoid: Apply for an ATIN using Form W-7A as soon as your adoption begins. Don't wait until tax time.

Mistake #4: Claiming credit for a foreign adoption before it's final

Foreign adoption expenses cannot be claimed until the adoption is legally finalized, even if you paid expenses in prior years.

How to avoid: Wait until you have the final decree, then claim all expenses from all years in that finalization year.

Mistake #5: Not keeping state documentation for special needs

If you claim a special needs adoption, the IRS may ask for proof of the state's determination. Without it, your claim could be disallowed.

How to avoid: Request and keep copies of all state agency letters, adoption assistance agreements, or determinations stating the child has special needs.

Mistake #6: Dividing credits incorrectly when two people adopt the same child

If you and another person (not your spouse) each contribute to adopting the same child, you must split the $14,890 maximum between you. You can't each claim $14,890.

How to avoid: Agree on the split in writing and ensure both parties claim their agreed portion consistently.

Mistake #7: Not claiming unsuccessful adoption expenses

Failed adoption attempts for U.S. children still qualify for the credit. Many people don't realize they can claim these expenses.

How to avoid: Track and claim expenses from all adoption attempts for U.S. children, whether successful or not.

What Happens After You File

Once you file your tax return with Form 8839 attached, the IRS will process your return through its standard procedures:

Initial Processing

Your return goes through automated screening where the IRS verifies basic information like identification numbers, income reporting, and calculation accuracy. This typically takes 3-4 weeks for e-filed returns or 6-8 weeks for paper returns.

Verification

The IRS may compare your claimed employer benefits against W-2 information received from employers. They'll also verify that identification numbers for adopted children are valid. For special needs adoptions, they may request documentation of the state's determination.

Credit Application

Your nonrefundable credit will reduce your tax liability dollar-for-dollar up to the amount of tax you owe. If your credit exceeds your tax liability, the excess automatically carries forward to the next year. You'll need to use the Adoption Credit Carryforward Worksheet when filing your 2023 return.

Refund or Balance Due

If you're due a refund after applying your adoption credit, expect it within 21 days for e-filed returns with direct deposit. If you owe additional tax despite the credit, pay by the April deadline to avoid penalties and interest.

Potential Correspondence

The IRS may send notices requesting additional documentation, especially for:

• Special needs determinations lacking state documentation
• Foreign adoptions with unclear finalization dates
• High-dollar expense claims without supporting records
• Discrepancies between Form 8839 and W-2 adoption benefits

If you receive an IRS notice, respond promptly with requested documentation. Common supporting documents include adoption decrees, state agency letters, receipts for qualified expenses, and proof of employer adoption assistance program details.

Audit Considerations

Adoption credits aren't specifically high-audit items, but maintain thorough records for at least three years after filing. The IRS recommends keeping adoption contracts, agency correspondence, receipts, travel logs, and legal documents.

If the IRS denies or reduces your credit, you have appeal rights. You can request reconsideration, appeal to the IRS Office of Appeals, or ultimately petition the U.S. Tax Court if disagreements persist.

IRS Appeals Information

FAQs

Q1: Can I claim the adoption credit for adopting my stepchild?

No. Expenses for adopting your spouse's child do not qualify for the credit or exclusion. This restriction applies even if you paid substantial legal fees and court costs. The credit is designed for children who need placement into new families, not for formalizing existing family relationships.

Q2: What happens if my adoption falls through after I've claimed expenses?

For U.S. adoptions, you can still claim the credit for unsuccessful adoption attempts. You paid the expenses in good faith while trying to adopt an eligible child. If you later successfully adopt a different child, you combine the expenses from both attempts (up to the maximum) since you were trying to adopt one eligible child. The credit doesn't require successful completion, only that you attempted to adopt an eligible U.S. child.

Q3: We adopted a child from China in 2022, but paid expenses in 2020 and 2021. When do we claim the credit?

You claim all expenses (from 2020, 2021, and 2022) on your 2022 return—the year the foreign adoption became final. This is different from domestic adoptions, where you generally claim expenses the year after paying them. For foreign adoptions, everything waits until finalization, then you get to claim the cumulative expenses up to the $14,890 maximum.

Q4: Can same-sex couples claim the adoption credit?

Yes. Same-sex married couples filing jointly can claim the adoption credit under the same rules as opposite-sex couples. Registered domestic partners who can establish joint legal adoption in states recognizing second-parent adoption may also qualify. The key requirement is that you must file a joint return if married, and you must meet all other eligibility criteria.

Q5: Do I have to claim the credit in the first year it's available, or can I wait?

For domestic adoptions, you should claim the credit when eligible under the timing rules (usually the year after paying expenses). Deliberately skipping a year could cause complications. However, if you had no tax liability in a particular year, the credit would simply carry forward automatically. If you accidentally forget to claim it, you can file an amended return for up to three years to claim credits you missed.

Q6: How does the income phaseout work if my income is in the middle range?

If your MAGI falls between $223,410 and $263,410 in 2022, your credit and exclusion are reduced proportionally. The reduction formula is: (MAGI - $223,410) ÷ $40,000 = reduction percentage. For example, with MAGI of $243,410, you're $20,000 into the phaseout range. That's 50% ($20,000 ÷ $40,000), so your maximum credit would be reduced to 50% of $14,890, or $7,445. The Form 8839 instructions include worksheets to calculate this precisely.

Q7: We adopted siblings—do we get $14,890 for each child or total?

You get $14,890 per child, not per adoption. If you adopted two siblings in 2022, your maximum credit is $29,780 ($14,890 × 2), subject to income limitations and the amount of qualified expenses paid. Each child's adoption is treated separately for credit purposes. This can provide substantial tax relief for families adopting sibling groups.

For More Information:

Official IRS Form 8839 and Instructions
IRS Adoption Credit Page
Understanding the Adoption Tax Credit
File an Amended Return

This guide is based on 2022 tax law and IRS publications. Tax laws change periodically, so always verify current requirements when filing. Consider consulting a tax professional for complex adoption situations involving multiple years, foreign countries, or special needs determinations.