Adopted in 2017 domestically and it will be final in 2018. Have expenses from 2015 from hen we started. Can we claim those this year? Or Can I amend 2016 return?

[DanO · Accepted solution]

For qualified adoption expenses in a domestic adoption, the credit is taken the year following the payment of expenses.

These credits are allowable for the tax year following the year of payment even if the adoption is never finalized.

So the expenses from 2015 could be taken on an amended 2016 return, and any qualified expenses in 2016 can be taken on your 2017 return.  Your expenses for 2017 will be taken on your 2018 return when adoption is finalized.

The Qualified Adoption Expenses defined in section 23(d)(1) are:

• Reasonable and necessary adoption fees,
• Court costs and attorney fees,
• Traveling expenses (including amounts spent for meals and lodging while away from home), and
• Other expenses that are directly related to and for the principal purpose of the legal adoption of an eligible child.

[brent247]

Great. Thank you.  One follow-up question. Even though my daughter wasn’t born until 2017 I can still do the amended return for 2016, correct?

[DanO]

Yes, here is a statement from IRS Topic 607 Adoption Credit and Adoption Assistance Programs; "An expense may be a qualified adoption expense even if the expense is paid before an eligible child has been identified.  For example, prospective adoptive parents who pay for a home study at the outset of an adoption effort may treat the fees as qualified adoption expenses."

[brent247]

I am doing the amended tax return for 2016 using turbotax. When I put in my daughter's info in for the credit it doesn't like it because she was born in 2017. But without a child it says I don't qualify. How should I fill in that space? Thanks again.

[DanO]

Try entering UNKNOWN for your daughter's first and last name.