What is the adoption tax credit?

The adoption tax credit is a federal program designed to help offset the costs associated with adoption. In Colorado, the adoption tax credit is a nonrefundable credit, meaning it reduces the amount of taxes you owe, but it does not provide a tax refund. The credit amount is based on the amount of qualified adoption expenses paid in the current tax year. Qualified expenses include adoption fees, attorney fees, court costs, and travel expenses. The credit amount for 2020 is up to $14,300 per child. To be eligible to claim the credit, you must be the adoptive parent of an eligible child under 18 years of age. You must also provide proof of adoption and all associated adoption costs. Additionally, the tax credit is subject to income restrictions which are set by the Internal Revenue Service (IRS). In general, the tax credit is available to taxpayers whose modified adjusted gross income is less than $242,000. The amount of credit a taxpayer can take begins to decrease when modified adjusted gross income reaches $214,520 and is completely phased out when modified adjusted gross income reaches $247,460.

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What is the adoption tax credit?

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