You are correct. Because of the nonrefundable nature of the Adoption Credit, if you can't use the entire credit's value in the first year you claim it, you can carry forward any remaining amount for up to five years.
For example, if you claim the full credit in 2023 but only have $10,000 of tax liability, the $5,950 credit balance rolls into the following year.
When you view your completed return, you will see your actual credit amount on Schedule 3, Line 6, which is included in the amount on Line 20 on Form 1040.
The credit amount for this year's return is calculated on the Qualified Adoption Expenses Worksheet.
I agree with you - but TurboTax doesn't seem to be calculating it this way. It is showing me getting back way more than what I paid in... curious if I'm filling out or answering one of TurboTax's questions wrong?
Try going back through the Adoption Credit section again and double-check your answers. If it still seems too high, you can create a diagnostic file so that someone can take a closer look and explain what is happening. The diagnostic file will not contain personally identifiable information, only numbers related to your tax forms.
If you wish to send a file, use the following instructions and then post the token number along with which version of TurboTax you are using and what state return you are filing in a follow-up thread.
Use these steps if you are using TurboTax Online:
If you are using a CD/downloaded version of TurboTax, use these steps: