Form 8839 Adoption Credit Checklist for 2019 Taxes

expenses paid or incurred during the 2019 tax year. The maximum adoption credit per eligible child is $14,080 for 2019, reflecting annual inflation adjustments under IRC Section 23.

This credit applies to domestic adoptions, foreign adoptions, and adoptions of children with special needs. For the 2019 tax year, the phase-out range for modified adjusted gross income commences at $211,160 and concludes at $251,160.

Eligible Children and Qualified Adoption Expenses

An eligible child must be under age 18 at the time of adoption or be physically or mentally incapable of self-care. Children with special needs qualify for the credit regardless of age if the state determines the child cannot be returned to parental care and requires adoption assistance.

Qualified adoption expenses include court costs, attorney fees, agency fees, document preparation and translation, traveling expenses while away from home, and home studies directly related to the legal adoption process. Expenses reimbursed by your employer’s qualified adoption assistance program or by other sources do not qualify for the credit.

Medical expenses, maternity costs, and general living expenses cannot be claimed as qualified adoption expenses. You must maintain receipts, invoices, and contracts for all claimed expenses to support your adoption tax credit claim if the Internal Revenue Service requests documentation.

Claiming Multiple Children and Credit Timing

You can claim the adoption credit for multiple children on the same Form 8839, whether they were adopted in the same year or different years. Form 8839 provides space for up to three children in Part I, and you must attach additional forms if you adopted more than three eligible children.

Timing rules for domestic adoptions

• If a domestic adoption was not final by the end of 2018, taxpayers may claim qualified

adoption expenses that were paid in 2018.

• If a domestic adoption became final in 2019, taxpayers may claim qualified adoption

expenses that were paid in both 2018 and 2019.

• If a domestic adoption became final before 2019, taxpayers may claim qualified adoption

expenses that were paid in 2019.

Timing rules for foreign adoptions

• For a foreign adoption, all qualified adoption expenses that were paid before the

adoption became final must be claimed in the year the adoption is finalized.

• Any qualified adoption expenses that are paid after a foreign adoption is already final

must be claimed in the tax year in which the expenses are paid.

Modified Adjusted Gross Income and Phase-Out

Calculations

Your modified adjusted gross income determines whether your adoption credit is reduced or eliminated. Calculate MAGI by starting with adjusted gross income from your 2019 Form 1040,

Form 1040-SR, or Form 1040-NR, then add back any foreign earned income exclusion, foreign housing exclusion or deduction, and exclusion of income for residents of American Samoa or

Puerto Rico.

1. Step 1: Determine Your Phase-Out Status

   Review your MAGI amount to determine if phase-out calculations apply. The full credit of

   $14,080 applies only if MAGI is $211,160 or less, while no credit is allowed if MAGI reaches or exceeds $251,160.

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2. Step 2: Calculate the Reduction Percentage

   Divide the excess MAGI above $211,160 by $40,000 and round up to the nearest whole percentage. Multiply the maximum credit of $14,080 by this percentage to determine the reduction amount using the worksheet in the 2019 Form 8839 instructions.

   Special Needs Adoptions and Documentation

   Requirements

   A child with special needs must meet three specific conditions under federal tax law. The child must have been a U.S. citizen or resident when the adoption effort began, a state must have determined that the child cannot or should not be returned to the parents’ home, and the state must have determined that the child will not be adopted unless assistance is provided to the adoptive parents.

   Written state documentation is required to claim a special needs adoption credit. Adoption assistance agreements from state child welfare agencies are acceptable evidence of special needs determination and may be used to support your claim for the adoption tax credit.

   You may be able to claim the full $14,080 credit for a special needs adoption even if you paid no qualified adoption expenses. All other requirements must be met, and the adoption must have become final in 2019.

   Carryforward Rules and Tax Liability

   The Form 8839 credit is a nonrefundable credit that reduces your federal income tax liability.

   Any unused credit that exceeds your tax liability for 2019 can be carried forward for up to five years under IRC Section 23.

   Taxpayers with unused adoption credit from 2018 can carry it forward to 2019 using the

   Adoption Credit Carryforward Worksheet on Line 16. This worksheet tracks carryforwards from prior tax years, including 2014, 2015, 2016, 2017, and 2018.

   Employer-Provided Adoption Assistance

   Employer-provided adoption assistance is excluded from your income on Form 1040, but you cannot claim the Form 8839 credit for expenses reimbursed by your employer. Your employer’s adoption assistance benefits should appear in Box 12 of your Form W-2 with Code T.

   You can claim both the exclusion and the credit for expenses of adopting an eligible child. The employer reimbursement amount must be deducted from your qualified adoption expenses, as it is impossible to claim both benefits for the same expenses.

   Completing and Filing Form 8839

   Report each eligible child separately in Part I of Form 8839 for domestic adoptions. Provide the child’s name and Social Security number, or use an adoption taxpayer identification number if the SSN is unavailable, and report only expenses incurred in 2019 for domestic adoptions.

   Use Part II only if the adoption was finalized outside the United States. If the foreign adoption was not finalized until 2019, report expenses that were paid or incurred in 2019 or prior years.

   Transfer the total adoption credit from Form 8839 to Schedule 3 of Form 1040 or Form

   1040-SR, or to the appropriate line on Form 1040-NR. Attach the completed Form 8839 to your tax return when you file for the 2019 tax year.

   The form structure remains permanent under the Tax Cuts and Jobs Act framework with no sunset provisions affecting 2019 filers. This provides stable credit availability through 2025 for adoptive families claiming qualified adoption expenses on their federal income tax returns.

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