We paid $6800 in 2015 to our adoption consultants, home study agency, and for the required book that goes to potential birth mothers. We were not matched with a child, and still are not.
Yes, you can claim the credit for a failed adoption.
When to claim is a separate issue. In a failed adoption, of course, there is no finalization. If you follow the IRS instructions to the letter, you claim the year after the expenses were incurred. If you do this, you can adjust your withholding to get immediate use of the money.
IRS instructions also state that, if you take a credit for a failed adoption, and later adopt successfully, you have to offset the credit. But nothing in the statutes or in legislative history supports this. Each adoption or failed adoption involves a different child, so you can take a separate credit for each.
To claim the adoption credit in TurboTax:
- Open your return in TurboTax.
- Search for adoption credit and then click the "Jump to" link in the search results.
- On the Information About This Adopted Child screen, leave the information blank and click the circle next to Neither special situation applies to this child.
- On the Tell Us a Little More About This Adoption screen, check This was a failed adoption attempt.
- Continue with the onscreen instructions.
Keep your adoption documents with your tax records.