The beginning of a new year often means a fresh start for many, but it also means it is time to start gathering tax documentation in order to file your tax returns for 2018. Adoptive parents who finalized their adoptions in 2018 may be able to obtain an adoption tax credit up to $13,810.00 per child.
In order to qualify for the credit, you must have adopted a child other than a stepchild, and the child must be under the age of 18 (unless they are physically or mentally unable to take care of themselves). The 2018 adoption tax credit is not a refundable credit, which means that you may benefit from the credit if you have a federal income tax liability, but cannot receive an additional amount as a refund.
Parents who adopted a child with special needs can claim the maximum credit of $13,810.00 whether or not the child had any adoption related expenses. For all other adoptions, parents can claim a credit based on their qualified adoption expenses which include court costs and legal fees, among other reasonable and necessary expenses.
If you qualify for the Adoption Tax Credit and finalized your adoption in 2018, please feel free to reach out to our office if you need an itemized statement of your legal fees and court costs. If you have questions regarding your eligibility, or how much of the credit you will be able to claim, we encourage you to speak with a tax professional.