Bring Home a Tax Credit for Adoption

When you adopt a child, you could bring home more than a bundle of joy. You may also be in line for a valuable tax credit.

child drawing of a family and their home

For 2022, a tax credit of up to $14,890 for adoption of a special needs child can come in handy for qualified parents facing the daunting costs of adoption (up from $14,440 for 2021). For other adoptions the credit is equal to qualified adoption expenses, up to a maximum of $14,890.

Income limit: For 2022, the credit begins to phase out for taxpayers with modified adjusted gross income (MAGI) of $223,410 and is eliminated for those with MAGI of $263,410 or more.

Experts estimate the entire adoption process can set parents back $25,000 or more. Here are some details of this tax break:

When Should you Take the Credit?

Here is a chart from the IRS that shows when parents should take the adoption credit:

IRS Adoption Credit Guide

For more information on the subject, consult with your tax advisor.

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