Adopting a child is a joyful experience—but it can also be expensive. The good news? The IRS offers significant tax relief through Form 8839, which helps families claim credits and exclusions for adoption-related costs. Whether you're adopting domestically or internationally, understanding this form can put thousands of dollars back in your pocket. Here's everything you need to know about Form 8839 for the 2019 tax year.

What Form 8839 Is For

Form 8839 serves two main purposes: it calculates your adoption tax credit and determines whether you can exclude employer-provided adoption benefits from your taxable income. Think of it as a two-part tool that addresses both the expenses you paid out-of-pocket and any assistance your employer may have provided.

For 2019, both the maximum credit and the maximum exclusion are $14,080 per eligible child. Importantly, you can claim both benefits for the same adoption—as long as you don't double-count the same expenses. For example, if your adoption cost $30,000, you might exclude up to $14,080 in employer assistance and claim up to $14,080 in credits for your remaining out-of-pocket costs (subject to income limits).

The credit is nonrefundable, meaning it can only reduce your tax liability to zero—not generate a refund. However, any unused credit can be carried forward for up to five years, giving you multiple opportunities to use it. 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 (Form 1040, 1040-SR, or 1040-NR) for the year when your adoption expenses become eligible for the credit or exclusion. The timing depends on whether you're adopting a U.S. child (citizen or resident) or a foreign child:

For U.S. adoptions

• Expenses paid before finalization: Claim them the year after you paid them
• Expenses paid in the year adoption finalizes: Claim them that same year
• Expenses paid after finalization: Claim them the year you paid them

For foreign adoptions

You can only claim expenses in the year the adoption becomes final (or any year after), regardless of when you paid them. This means if you paid $20,000 over three years but the adoption finalized in 2019, all those expenses are claimable in 2019.

Late or amended returns

If you forgot to claim the credit on your original 2019 return, you can file an amended return using Form 1040-X within three years of your original filing deadline (generally by April 15, 2023, for 2019 returns). You'll attach a corrected Form 8839 to show the credit you should have claimed. IRS Tax Tip on Adoption Credit

Key Rules for 2019

Understanding these rules helps maximize your benefit and avoid errors:

Dollar Limits

• Maximum credit per child: $14,080
• Maximum employer benefit exclusion: $14,080
• You cannot claim more than $14,080 in combined credit for the same child across multiple years (excluding special-needs exceptions)

Income Limits

The credit and exclusion begin phasing out when your modified adjusted gross income (MAGI) exceeds $211,160 and completely disappear at $251,160. The phase-out is gradual—for every dollar of income above $211,160, you lose a portion of the benefit.

Qualified Expenses

These include adoption fees, court costs, attorney fees, travel expenses (meals and lodging while away from home), and re-adoption costs for foreign children. They do not include expenses reimbursed by your employer, costs for adopting your spouse's child, or surrogate parenting arrangements.

Special Needs Exception

If you adopted a U.S. child with special needs who was finalized in 2019, you can claim the full $14,080 credit even if you paid no expenses. The state must have officially determined the child has special needs (you'll need documentation).

Filing Status

You must file as single, head of household, qualifying widow(er), or married filing jointly. Married taxpayers generally must file jointly, though exceptions exist if you're legally separated or meet specific "considered unmarried" criteria. Form 8839

Step-by-Step (High Level)

Here's the general workflow for completing Form 8839:

Part I – Child Information

Start by providing basic details about each child you adopted or attempted to adopt: name, birth year, whether they have special needs or are foreign-born, their Social Security Number (SSN) or Adoption Taxpayer Identification Number (ATIN), and whether the adoption finalized in 2019 or earlier. You can report up to three children on one form; additional children require separate forms.

Part III – Employer Benefits (Complete This First)

If your employer provided adoption assistance, start here. Enter the maximum exclusion ($14,080), subtract any benefits excluded in prior years, then enter the benefits you actually received in 2019 (shown in Box 12 of your W-2 with code "T"). The form calculates how much you can exclude and how much, if any, is taxable. This step is crucial because employer reimbursements reduce the expenses available for the credit.

Part II – Adoption Credit

Now calculate your credit. Enter the maximum ($14,080), subtract any credit claimed in prior years for the same child, then enter your qualified expenses. The form applies the income phase-out based on your MAGI and determines your allowable credit. If you have carryforward credit from 2018, add that here. Finally, compare your calculated credit to your tax liability (using the Credit Limit Worksheet) to determine the actual credit you can use this year.

Transfer to Main Return

Enter the credit amount from Form 8839, line 16, on Schedule 3 (Form 1040), line 6, checking box c and writing "8839." Any excluded employer benefits reduce your wages on Form 1040, line 1, with the notation "AB" or "SNE" for special-needs cases. IRS Form 8839 Instructions

Common Mistakes and How to Avoid Them

Mistake 1: Double-counting expenses

The most common error is claiming both the employer exclusion and the credit for the same expenses. For example, if your employer reimbursed $10,000 in legal fees, you cannot also claim a credit for those $10,000. Solution: Complete Part III first, then subtract those amounts from Part II.

Mistake 2: Wrong timing for foreign adoptions

Many taxpayers claim expenses in the year paid rather than waiting for finalization. Solution: Foreign adoption expenses can only be claimed in the year the adoption becomes final or later—no matter when you paid them.

Mistake 3: Missing the special-needs full credit

Families adopting special-needs children often claim only the expenses they paid, not realizing they're entitled to the full $14,080 even with minimal expenses. Solution: Check column (d) in Part I and ensure you have state documentation confirming the special-needs determination.

Mistake 4: Incorrect MAGI calculation

Some taxpayers use their standard AGI instead of modified AGI, which includes add-backs for certain deductions and exclusions. Solution: Use the worksheet in the Form 8839 instructions to calculate MAGI correctly—it typically starts with AGI from Form 1040, line 8b, then adds back specific items.

Mistake 5: Missing identification numbers

Leaving column (f) blank delays processing or triggers rejections. Solution: Apply for an SSN (Form SS-5), ATIN (Form W-7A for U.S. adoptions in progress), or ITIN (Form W-7 for foreign children) as early as possible. IRS Form 8839 Instructions

What Happens After You File

Once you file Form 8839 with your tax return, the IRS processes it as part of your overall return. Here's what to expect:

Initial Processing

Your adoption credit reduces your tax liability dollar-for-dollar. If you owed $15,000 in taxes and claimed a $14,080 credit, you'd only owe $920. If your credit exceeds your tax liability, the unused portion carries forward to future years (up to five years).

IRS Review

The IRS may select your return for review, especially if you're claiming the special-needs full credit or have multiple adoptions. Be prepared to provide documentation: adoption decrees, receipts for qualified expenses, employer assistance program details, and state special-needs determinations.

Carryforward Tracking

If you have unused credit, you'll need to track it using the Adoption Credit Carryforward Worksheet in the instructions. This amount appears on line 16 of your Form 8839 and carries to next year's return. Keep detailed records—the IRS doesn't send reminders about carryforward amounts.

Amended Returns

If the IRS adjusts your credit or if you discover errors, you can file Form 1040-X to correct it. This is common when adoptions span multiple years or when families initially misunderstand the timing rules. IRS Tax Tip on Adoption Credit

FAQs

Q: Can I claim the credit for adopting my spouse's child?

No. The adoption credit specifically excludes expenses for adopting your spouse's child, whether from a previous relationship or any other circumstance.

Q: What if my employer is an S corporation where I own stock?

If you own more than 2% of an S corporation (by shares or voting power), you cannot exclude employer-provided adoption benefits. You can still claim the adoption credit for your out-of-pocket expenses.

Q: Are home study fees qualified expenses?

Yes. Home study costs are qualified expenses, even if you pay them before you've identified a specific child to adopt. They're considered part of the adoption process.

Q: Can registered domestic partners claim the credit?

Yes, if they live in a state allowing same-sex second-parent or co-parent adoption. Each partner may claim their share of qualified expenses, and the $14,080 limit is divided between them as they agree.

Q: What happens to my credit if the adoption falls through?

For U.S. adoptions, you can still claim the credit for qualified expenses in unsuccessful adoption attempts. For foreign adoptions, you cannot claim any credit if the adoption never finalizes.

Q: Can I claim both years' expenses if my adoption finalized in 2019?

Yes. For U.S. adoptions finalized in 2019, you can claim expenses from both 2018 (if the adoption wasn't final then) and 2019 on your 2019 return. The total cannot exceed $14,080 per child.

Q: Where can I get an ATIN if my child doesn't have an SSN yet?

File Form W-7A (Application for Taxpayer Identification Number for Pending U.S. Adoptions) with the IRS. You'll need to provide documentation showing the adoption is pending. Processing typically takes 4-6 weeks. IRS Form 8839 Information

Additional Notes

Note: This guide is based on IRS publications and instructions for the 2019 tax year. Tax laws and regulations may have changed since then. For current-year adoptions or complex situations, consult a tax professional or visit IRS.gov/Form8839 for the latest information.

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