What is the adoption tax credit?

The Adoption Tax Credit is a federal tax credit available to taxpayers who adopt a child. This tax credit is available to parents who adopt a child, whether through a private adoption, an international adoption, or a state-run foster care system. It provides an incentive for adoptive parents to do the often-costly process of adoption. In Virginia, a taxpayer may be eligible for the adoption tax credit, depending on their individual circumstances and whether they adopted a child in a domestic or foreign country. Generally, the credit is available to taxpayers whose modified adjusted gross income is $214,630 or less for a single child adoption. The credit is equal to the “qualified adoption expenses,” including legal and court costs, adoption fees, travel expenses, and the cost of caring for a child prior to the adoption. For married couples, the credit can be up to $14,300 per child, and for single parents, it can be up to $7,150. For those who adopt from a state-run foster care system, many of the expenses associated with an adoption may be waived. Additionally, many states offer other forms of financial assistance for adoptive families. In Virginia, those who adopt from the foster care system can qualify for the Adoption Assistance Program, which helps cover the costs of the adoption process.

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What is the adoption tax credit?

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