What Form 8839 Is For

Form 8839 helps families who adopted or attempted to adopt a child claim valuable tax benefits related to adoption expenses. This IRS form serves two distinct purposes: calculating the Adoption Tax Credit (Part II) and determining the exclusion for employer-provided adoption benefits (Part III). IRS.gov

For the 2021 tax year, the maximum adoption credit and maximum exclusion for employer-provided benefits were both $14,440 per eligible child. This is a non-refundable credit, meaning it can reduce your tax liability to zero but won't generate a refund beyond what you've already paid. However, if you can't use the entire credit in one year, you can carry forward any unused portion for up to five future years. IRS.gov

The form requires detailed information about each adopted child, including their identifying number (SSN, ATIN, or ITIN), birth year, and whether the adoption is domestic or foreign. You'll also document your qualified adoption expenses and calculate how much of the credit or exclusion you can claim based on your modified adjusted gross income (MAGI).

When You’d Use Form 8839 (Late/Amended Filing)

You should file Form 8839 with your original tax return for the year you're claiming the credit or exclusion. However, life happens, and you may need to file late or amend a previous return.

Filing an amended return using Form 1040-X becomes necessary if you forgot to claim the adoption credit on your original return, discovered additional qualified expenses after filing, or made errors in calculating the credit. The good news is that the statute of limitations generally gives you three years from the original filing deadline to amend your return and claim overlooked credits. IRS.gov

Late filing situations often arise because adoption expenses span multiple years. For domestic adoptions that weren't finalized by year-end 2021, you must wait until the following year (2022) to claim 2021 expenses. For foreign adoptions, you can't claim any expenses until the adoption becomes final. This timing requirement causes many families to file Form 8839 for "prior year" expenses well after those costs were actually paid.

If you have a credit carryforward from 2020, you must include Form 8839 with your 2021 return to claim that carryforward amount, even if you had no new adoption expenses in 2021.

Key Rules or Details for 2021

Income Limits

The credit and exclusion begin phasing out when your MAGI exceeds $216,660 and are completely eliminated at $256,660 or more. The phase-out reduces benefits proportionally within this range. IRS.gov

Eligible Children

A child qualifies if they're under age 18 or physically/mentally unable to care for themselves regardless of age. The child must be a U.S. citizen or resident (domestic) or foreign national (with different timing rules).

Timing Differences

Domestic adoptions (U.S. children) allow you to claim expenses even if the adoption never becomes final. You claim expenses in the year after payment or the year of finalization, whichever comes first. Foreign adoptions require finalization before any credit can be claimed, and all expenses—regardless of when paid—are claimed in the finalization year. IRS.gov

Special Needs Exception

For U.S. children determined by a state agency to have "special needs," you can claim the full $14,440 credit even if you paid zero qualified expenses, provided the adoption finalized in 2021 and all other requirements are met.

Filing Status Requirements

You must file as single, head of household, qualifying widow(er), or married filing jointly. Married persons filing separately can only claim the credit if they lived apart from their spouse for the last six months of 2021 and meet specific requirements.

Step-by-Step (High Level)

Step 1: Gather documentation including adoption agency contracts, attorney bills, court documents, travel receipts, and Form(s) W-2 showing employer adoption benefits (Code T in Box 12).

Step 2: Complete Part I for each eligible child, providing their identifying information. Obtain an SSN, ATIN, or ITIN for each child—this is mandatory for claiming the credit.

Step 3: If you received employer adoption benefits, complete Part III first. Calculate the maximum exclusion ($14,440), subtract any prior year benefits for the same child, and determine your allowed exclusion based on your MAGI.

Step 4: Complete Part II to calculate the adoption credit. Enter qualified expenses (adoption fees, attorney costs, court costs, travel expenses including meals and lodging, and re-adoption expenses for foreign children). Subtract any amounts reimbursed by your employer—you cannot claim the same expenses twice.

Step 5: Apply the income phase-out calculation if your MAGI exceeds $216,660. Add any credit carryforward from 2020.

Step 6: Complete the Credit Limit Worksheet to determine how much credit you can actually use in 2021 based on your tax liability.

Step 7: Attach Form 8839 to your Form 1040, 1040-SR, or 1040-NR and enter the credit amount on Schedule 3, line 6c.

Common Mistakes and How to Avoid Them

Missing or incorrect child identification numbers

The most common e-file rejection reason involves SSN mismatches or missing ATINs/ITINs. Apply for the appropriate identification number well before filing using Form SS-5, W-7A, or W-7. IRS.gov

Double-counting expenses

Many filers mistakenly claim both the credit and exclusion for identical expenses. Remember: employer-reimbursed expenses do NOT qualify for the credit. Calculate the exclusion first, then claim only unreimbursed expenses for the credit.

Wrong year timing for foreign adoptions

Families frequently claim foreign adoption expenses too early. You must wait until the adoption is completely finalized—often in a U.S. state court after the foreign proceeding. IRS.gov

Combining multiple adoption attempts incorrectly

When you made multiple attempts to adopt one U.S. child (including failed attempts), combine all expenses on the "Child 1" line rather than listing each attempt separately.

Forgetting state special needs determinations

If claiming the special needs exception, the state must have made an official determination before finalization. Keep this documentation—a diagnosis or condition alone isn't sufficient proof.

Incorrect MAGI calculations

The phase-out uses modified adjusted gross income, which includes certain foreign income exclusions and other adjustments. Use the worksheet in the Form 8839 instructions to calculate correctly. IRS.gov

What Happens After You File

After submitting Form 8839 with your tax return, the IRS processes your adoption credit claim along with the rest of your return. This typically takes the same timeframe as standard return processing—21 days for e-filed returns, six to eight weeks for paper returns.

The IRS may request additional documentation to substantiate your claim. Keep detailed records including receipts, cancelled checks, agency contracts, court documents, travel itineraries, and proof of the child's special needs determination (if applicable). The IRS specifically suggests reviewing Notice 2010-66 for examples of acceptable documentation. IRS.gov

If you can't use your entire credit in 2021 due to insufficient tax liability, the unused portion carries forward for up to five years (through 2026 for the 2021 credit). You must file Form 8839 each year to claim the carryforward amount. Keep your 2021 Adoption Credit Carryforward Worksheet—you'll need it for future returns.

For employer-provided benefits, the excluded amount won't appear in your wages on line 1 of Form 1040. However, if your benefits exceeded the allowable exclusion, the taxable portion must be included in your wages with notation "AB" on the dotted line.

FAQs

Can I claim the adoption credit for my stepchild?

No. Expenses for adopting your spouse's child never qualify for the adoption credit or exclusion, regardless of the costs involved. IRS.gov

What if our adoption attempt failed—can we still get the credit?

Yes, for domestic (U.S.) adoptions. Failed adoption attempts still qualify if the child was a U.S. citizen or resident when the effort began. You claim expenses in the year after payment. Foreign adoptions do not qualify unless finalized. IRS.gov

Do surrogacy expenses qualify?

No. The law explicitly excludes expenses for carrying out surrogate parenting arrangements from qualified adoption expenses. IRS.gov

Can both parents claim the credit if we're divorced or unmarried?

If two people who aren't married or filing jointly both paid expenses for the same child, you must divide the $14,440 maximum between you in any way you both agree. The same rule applies to employer benefits. IRS.gov

What counts as "qualified adoption expenses"?

Qualified expenses include adoption fees, attorney fees, court costs, travel expenses (meals and lodging while away from home), and re-adoption expenses for foreign children. Expenses do NOT qualify if reimbursed by your employer, paid through government programs, or that violate state or federal law. IRS.gov

What if I adopted siblings—can I claim multiple credits?

Yes! The $14,440 maximum applies per eligible child. If you adopted two siblings, you can potentially claim up to $28,880 in credits (subject to income limits and your tax liability). IRS.gov

How do I know if my foreign adoption is considered "final"?

The determination depends on whether the country is a Hague Convention country. Non-Hague adoptions generally allow you to choose either the foreign country finalization year or the U.S. re-adoption year. See IRS Revenue Procedures 2005-31 and 2010-31 for detailed guidance. IRS.gov