Adoption Tax Credit Carry Forward

[bpaulg]

Is the below information correct?  We adopted in 2019, and used the credit then:

If you first used the federal adoption tax credit for an adoption in 2019, you could only carry forward any unused portion for five additional tax years—which means:

• 2019 (the year you first claimed it)
• 2020 (1st carryforward year)
• 2021 (2nd carryforward year)
• 2022 (3rd carryforward year)
• 2023 (4th carryforward year)
• 2024 (5th and final carryforward year)

Since the 2024 tax return is for the 2023 tax year, you can still use any remaining adoption tax credit when filing taxes in 2024 (for tax year 2023). However, the credit cannot be carried forward past 2024 for use on your 2024 tax year return (filed in 2025).

If you still have unused credit left, you must apply it on your 2023 tax return (due in April 2024) before it expires.

[DawnC]

The tax return you are filing now, in 2025, is for tax year 2024 - and would be the 5th and final year you could carryforward the credit.  

When to claim the credit:

• Domestic adoptions: Claim expenses each year as you incur them, whether you finalize the adoption or identify an eligible child.
• Foreign adoptions: Claim expenses once the adoption is final. When it’s final, you can claim all eligible expenses you paid, including in past years.
• Adoption of children deemed by a state welfare agency as special needs or hard to place: Claim expenses when the adoption is final.

Find examples of these timing rules to claim a credit in the Instructions for Form 8839.

You can also carry unused credits to 5 future years if:

• It’s from the year you were first eligible for the credit and you filed a joint return.  See Adoption Credit

How to claim the Adoption Credit in 2024