Deductions & credits
I think TurboTax is correct.
Since the Adoption Credit is Non-Refundable, that credit should be applied BEFORE a refundable credit such as the Additional Child Tax Credit.
The IRS also instructs that the Adoption Credit should be applied before the Child Tax Credit.
According to the IRS:
- Form 8839, Qualified Adoption Expenses
- Schedule R, Credit for the Elderly or the Disabled
- Form 8910, Alternative Motor Vehicle Credit
- Form 8936, Qualified Plug-In Electric Motor Vehicle Credit
- Form 8396, Mortgage Interest Credit
- Form 8859, Carryforward of the District of Columbia First-Time Homebuyer Credit
- Form 8834, Qualified Electric Vehicle Credit
- Form 8912, Credit to Holders of Tax Credit Bonds
Note:* CTC and ODC should be applied to tax only after the nonrefundable credit that appear before these credits on the tax return or appropriate schedule. This is done to help the taxpayer maximize their amount of credit.
- These nonrefundable credits are:
- Subtracted from the tax amount.
- Limited to the amount of the tax liability subject to any applicable limitation based on the amount of tax under IRC 26 or IRC 38(c).
- Used before refundable credits.
