Form 8839 (2019) Qualified Adoption Expenses Checklist
Form 8839 for 2019 allows taxpayers to claim an adoption credit and exclude employer-provided adoption benefits under IRC §§ 23 and 137. The 2019 maximum credit per child is $14,080, with a modified adjusted gross income (MAGI) phase-out threshold beginning at $211,160. Special rules apply to children with special needs whose adoptions became final in 2019, permitting the full credit regardless of actual expenses paid.
Understanding Form 8839 for 2019
The adoption credit is a nonrefundable tax credit designed to help offset the costs of adopting an eligible child. For 2019, taxpayers may claim up to $14,080 per child in adoption expenses and may also exclude up to $14,080 in employer-provided adoption benefits from their income. These benefits apply to both domestic and international adoptions, although the timing rules differ. The credit begins to phase out for taxpayers with MAGI above $211,160 and is eliminated for those with MAGI of $251,160 or more.
Step-by-Step Checklist for Completing Form 8839 (2019)
Step 1: Complete Part I with Eligible Child Information
Enter complete information for each eligible child in Part I. Provide the child’s name, year of birth, and identifying number (Social Security Number, Adoption Taxpayer Identification Number, or Individual Taxpayer Identification Number). Check all applicable boxes indicating whether the child was born before 2002 and is disabled, designated as a child with special needs, or is a foreign child. Mark the box in column (g) if the adoption became final in 2019 or earlier. For foreign child adoptions, review the special rules in the instructions before completing Parts II or III, as different timing requirements apply.
Step 2: Determine the Maximum Adoption Credit for Each Child
Enter $14,080 on line 2 for each child. This is the maximum adoption credit allowed per child for the 2019 tax year. If you are adopting the same child with another person who is not your spouse (in cases where you are filing jointly), you must divide the $14,080 limit between you. You may agree on any division of the limit and enter your allocated share on line 2.
Step 3: Account for Prior-Year Credits Claimed
On line 3, enter the total of any adoption credits previously claimed for the same child in prior years. If you filed Form 8839 in 2018 or earlier for this child, refer to your previous year’s Form 8839 and enter the total of lines 3 and 6 from the most recent form filed for that child. If this is the first year you are claiming the credit for this child, enter zero on line 3.
Step 4: Calculate the Available Credit Amount
Subtract line 3 from line 2 and enter the result on line 4. This represents the remaining adoption credit available for this child after accounting for any credits claimed in previous years.
Step 5: Enter Qualified Adoption Expenses
Report qualified adoption expenses on line 5. These expenses include reasonable and necessary costs directly related to the legal adoption, such as adoption fees, attorney fees, court costs, travel expenses (including meals and lodging while away from home), and re-adoption expenses for foreign children. Do not include expenses reimbursed by your employer under a qualified adoption assistance program, expenses paid through state or federal programs, expenses that violate the law, surrogate parenting arrangement costs, or expenses for adopting your spouse’s child.
For domestic adoptions not finalized by the end of 2019, enter expenses paid in 2018.
For adoptions that became final in 2019, enter expenses paid in both 2018 and 2019.
For adoptions finalized before 2019, enter only costs paid in 2019. Special rules apply to foreign adoptions, where you can only claim the credit in the year the adoption becomes final, using the total expenses from all years.
For special needs adoptions that became final in 2019, enter $14,080 minus any qualified adoption expenses used to figure the adoption credit in prior years (the amount on line 3), even if you paid less in actual costs or paid no fees at all.
Step 6: Determine the Smaller Amount for Phase-Out Calculation
Enter the smaller of line 4 or line 5 on line 6. This amount will be used to calculate any phase-out reduction based on your modified adjusted gross income.
Step 7: Calculate Modified Adjusted Gross Income
Determine your modified adjusted gross income (MAGI) for the adoption credit and enter it on line 7. Generally, MAGI is your adjusted gross income from Form 1040 or 1040-SR with certain modifications. Consult the worksheet in the Form 8839 instructions to properly calculate your MAGI if you have foreign-earned income, foreign housing costs, or certain other exclusions.
Step 8: Apply the MAGI Phase-Out Threshold
Compare your MAGI on line 7 to $211,160. If line 7 is $211,160 or less, skip lines 8 and 9 and enter zero on line 10. Your credit will not be reduced. If line 7 exceeds $211,160, subtract $211,160 from line 7 and enter the result on line 8. This represents the excess income that will reduce your credit.
Step 9: Calculate the Phase-Out Percentage
Divide the amount on line 8 by $40,000 and enter the result on line 9 as a decimal rounded to at least three decimal places. Do not enter more than 1.000. This decimal represents the proportional phase-out rate that will be applied to reduce your credit. The credit is completely phased out when MAGI reaches $251,160.
Step 10: Determine Credit Reduction and Allowable Credit
Multiply each amount on line 6 by the decimal on line 9 and enter the results on line 10. This is the amount by which your credit will be reduced due to the income phase-out. Subtract line 10 from line 6 and enter the results on line 11. Add all amounts from line 11 and enter the total on line 12. This is your current year adoption credit before considering any carry-forward from prior years.
Step 11: Add Credit Carryforward from Prior Years
On line 13, enter any adoption credit carryforward from prior years. If you used the Adoption Credit Carryforward Worksheet in your 2018 Form 8839 instructions, refer to that worksheet to determine the amount to enter. The worksheet tracks unused credits from previous years that can be carried forward. Add lines 12 and 13 and enter the total on line 14.
Step 12: Apply the Credit Limit
Complete the Credit Limit Worksheet provided in the 2019 Form 8839 instructions to determine the maximum amount of nonrefundable personal credits you can claim. Enter the result from line 5 of that worksheet on line 15. This limit is based on your tax liability and ensures you do not claim more credit than you can use.
Step 13: Report the Adoption Credit on Your Tax Return
Enter the smaller of line 14 or line 15 on line 16. This is your allowable adoption credit for the 2019 tax year. Report this amount on Schedule 3 (Form 1040 or 1040-SR), line 6, or Form 1040-NR, line 51. Check box c on that line and enter “8839” in the space next to box c. If line 15 is smaller than line 14, you may have a credit carryforward to the 2020 tax year. Complete the Adoption Credit Carryforward Worksheet in the 2019 instructions to determine the amount you can carry forward.
Step 14: Complete Part III for Employer-Provided Adoption Benefits
Suppose you received employer-provided adoption benefits in 2019—complete Part III. Enter $14,080 on line 17 for each child. If you received benefits in a prior year for the same child, enter on line 18 the total amounts from lines 18 and 22 of the last Form 8839 you filed for that child. Otherwise, enter zero. Subtract line 18 from line 17 and enter the result on line 19.
Enter on line 20 the total employer-provided adoption benefits you received in 2019 for each child. This amount should be shown in box 12 of your 2019 Form W-2 with code T. Add all amounts from line 20 and enter the total on line 21.
Step 15: Calculate the Exclusion Amount
For line 22, enter the smaller of line 19 or line 20 for each child. However, if the child was designated as a child with special needs and the adoption became final in 2019, enter the full amount from line 19 regardless of the amount on line 20. Calculate your MAGI using the worksheet in the instructions and enter it on line 23.
If line 23 is more than $211,160, subtract $211,160 from line 23 and enter the result on line 24. Divide line 24 by $40,000 and enter the result on line 25 as a decimal. Multiply each amount on line 22 by line 25 and enter the results on line 26. Subtract line 26 from line 22 and enter the results on line 27. Add all amounts from line 27 and enter the total on line 28. This is your total excluded employer-provided adoption benefits.
Step 16: Report Taxable Benefits If Applicable
Compare line 28 to line 21 to determine if any benefits are taxable. If line 28 is less than line 21, subtract line 28 from line 21 and enter the result on line 29. This amount represents taxable benefits that must be included in your wages. Add this amount to line 1 of Form 1040 or 1040-SR (or line 8 of Form 1040-NR) and enter “AB” on the dotted line next to that entry.
If line 28 is more than line 21, subtract line 21 from line 28 and enter the result as a negative number on line 29. This represents excludable benefits from prior years. Reduce the total you would otherwise enter on line 1 of Form 1040 or 1040-SR (or line 8 of Form 1040-NR) by the amount on line 29. Enter the reduced result on your wage line and enter “SNE” on the dotted line next to that entry.
Step 17: Attach Form 8839 to Your Tax Return
Attach the completed Form 8839 to your Form 1040, Form 1040-SR, or Form 1040-NR when you file. Form 8839 is Attachment Sequence No. 38. Do not file Form 8839 separately. Keep all supporting documentation, including receipts, invoices, court documents, and evidence of qualified adoption expenses, in your records.
Key Points for 2019 Form 8839
The 2019 MAGI phase-out range is $211,160 to $251,160. This range applies to both the adoption credit and the exclusion for employer-provided adoption benefits. The phase-out rate is calculated by dividing the excess MAGI by $40,000.
The maximum adoption credit increased to $14,080 per child in 2019. This amount applies to all eligible adoption expenses, regardless of whether the adoption is domestic or international, although timing rules differ.
For children with special needs, if the adoption became final in 2019, you may claim the full maximum exclusion amount of $14,080 (minus any prior-year exclusions) in Part III, line 22, without regard to actual employer-paid benefits received. This ensures that no benefits are taxed simply because they exceeded actual expenses.
Employer-provided adoption benefits must be reported in box 12 of your 2019 Form W-2, with code T, to be reportable on Form 8839, Part III. If code T does not appear in box 12, this indicates no employer-paid adoption benefits were received during the tax year.
The Adoption Credit Carryforward Worksheet is located in the 2019 Form 8839 instructions on page 7. This worksheet helps calculate any unused credit that can be carried forward to future tax years. If you have an unused credit carryforward, keep the worksheet for use when preparing your 2020 tax return. The worksheet references the 2018 instructions only to help you locate prior-year carry-forward amounts that need to be entered on the 2019 worksheet.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
