Updated: Nov 30, 2019
For the tax year 2019, the adoption credit for the adoption of a child with special needs is $14,080 regardless of the actual amount the taxpayer paid. The maximum credit allowed for other non-special needs adoptions is the amount of qualified adoption expenses up to $14,080. The maximum exclusion from income for benefits under an employee adoption assistance program is $14,080.
In 2019, the credit begins phasing out for taxpayers with a MAGI in excess of $211,160. It is completely phased out for taxpayers with a MAGI of $251,160. In 2018 the phaseout range was from $207,140 to 247,140. The adoption credit is a nonrefundable credit, figured on Form 8839, then transferred to Schedule 3 (Form 1040), line 54.
Qualified adoption expenses include:
Travel expenses (including meals and lodging) while away from home
Re-adoption expenses relating to the adoption of a foreign child
Jason and Mary adopted Ben, a 5-month-old boy, in 2019. Ben is a special needs child. Their qualified adoption expenses were $5,680. Jason and Mary can claim $14,080 adoption credit on their 2019 joint tax return.