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New Member
posted Feb 4, 2024 12:34:26 PM

Adoption Expenses and Reimbursement in Different Year

Adoption expenses incurred throughout year, but adoption was finalized toward end of the year and employer reimbursements were not paid until next tax year. How do I account for that?

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3 Replies
Expert Alumni
Feb 7, 2024 9:53:48 AM

You don't say if this is domestic or foreign adoption.  See examples of various scenarios and how your return is affected at Topic no. 607, Adoption credit and adoption assistance 

New Member
Feb 8, 2024 5:56:46 PM

It is a domestic adoption. I thought the documentation I read stated that the adoption expenses had to be accounted for the same year the adoption was finalized. I'll read through what you provided, I'd appreciate any more help you can provide.

 

Thanks!

Expert Alumni
Feb 9, 2024 9:01:00 AM

Got it. So you really need to claim the adoption expenses now and subtract out the reimbursement received on Part III line 17 even though it was a different year. The IRS can easily understand you did not take the full credit due to the reimbursement.

 

The instructions for line 18 indicate to include prior year employer contributions but yours was after the fact. 

 

See: