What is the adoption tax credit?

The Adoption Tax Credit is a way for families to financially offset the costs of adopting a child. The tax credit was established by the United States government in 1997 as part of the Adoption and Safe Families Act. The credit is available to families in all fifty states, including Delaware. The Adoption Tax Credit is a dollar-for-dollar credit against a family’s federal income tax liability. The amount of the credit is based on the total amount of expenses the family incurred in order to complete the adoption. The maximum amount of the credit for 2021 is $14,440. Any credit amount that exceeds the family’s federal income tax liability can be refunded directly to the family. The only adopted children that qualify for the Adoption Tax Credit are children under the age of eighteen, or those that have special needs. Special needs adoptions do not necessarily have to come from a foster care system, but they must meet certain criteria set by the state of Delaware. The Adoption Tax Credit is a great way to ease the financial burden of adoption and help more families share the joys of having an adopted child in their lives. It can make an otherwise expensive process more affordable and help alleviate the financial stress that can come with the adoption process.

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What is the adoption tax credit?

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