Adoption Carry-Forward Tax Credit error on Turbo Tax’s form? Adopted child turned 18 in Oct- TT is not allowing me to claim my carry-forward credit due to this. Help!

[Crystalthefish]

I adopted a special needs child 4 years ago. I am supposed to have a $19,500 carry forward credit to apply to my tax liability. My child turned 18 last October so Turbo Tax keeps telling me that I don’t qualify for the carry over credit this year, but I can carry it forward next year. Resulting in my refund being almost $5000 lower.  However, the IRS documents show that I am still allowed to carry-forward those credits until I hit 5 years and says nothing about an age out period to be able to claim that credit. Is this an issue I need to resolve directly with Turbo Tax or am I misunderstanding something here?

[ThomasM125]

It is possible that you don't have sufficient income tax in 2021 to use the credit, as it cannot reduce your tax below $0. You need to look on line 24 on your form 1040 to see if you have any tax. If not, then the credit will be carried over to next year.

You can view your form 1040 while working in the online version of TurboTax by following these steps:

While working on your return in the Federal section of TurboTax:

   1.  Choose the Tax Tools icon on your left menu bar

   2.  Tools

   3.  View Tax Summary

   4.  Choose the Preview my 1040 on your left menu bar

[SN720622]

I am having same issue... Our adoption finalized in 2017 and I have a credit through this year but two of my kids are now 18 and 19 which does not affect the carryforward credit - but TurboTax won't let me put in all their information (such as year adoption was finalized and the carry over credit). It worked fine for my 16 year old - so I know the issue is the age. But all of them were under the age of 18 when adoption was finalized so I know the carry  forward is valid. Last year I had no issues and even then one of the kids had turned 18, so why does it not work this year? 

Turbo tax is kicking it out as an error - but won't even let me input the information to fix the error.... 

[GeorgeM777]

Regarding the adoption credit, the IRS has stated that an eligible child is an individual who is under the age of 18 or is physically or mentally incapable of self-care.  Given the age limitation, that probably explains why you are not seeing the credit for your children who are 18 or older. 

Tax benefits for adoption include both a tax credit for qualified adoption expenses paid to adopt an eligible child and an exclusion from income for employer-provided adoption assistance. The credit is nonrefundable, which means it's limited to your tax liability for the year.  You are correct in that any credit in excess of your tax liability may be carried forward for up to five years. The maximum amount (dollar limit) for 2021 is $14,440 per child.

Here is a link to the IRS webpage that discusses the adoption credit which you might find helpful. 

Adoption Credit

@SN720622

[SN720622]

Follow up question on your response....

The carry forward tax credit is from 2017 when she was 14. My understanding is that you  carry forward for five years no matter what age she is today. If the carry forward stops at the age 18, then I was only allowed to carry forward my tax credit for this child's adoption for 4 years and not 5.  (it is just a partial amount left, I have been using part of it during the last four years). 

Or are you saying that I loose the carry forward portion too when she turns 18? Even if I have not exceeded the five years?

[DaveF1006]

I don't see anything that excludes the carryover provision when you child turns 18. You may not had enough tax liability this year to take advantage of the last remaining portion of the adoption credit.

Go to tax tools>tools>view tax summary>preview my 1040.  Look on line 21 of the 1040 to see if there is a tax liability for which the credit can be applied. 

@SN720622

[SN720622]

I spoke to three different tax professionals and they agreed that the carry forward does not end just because a child turns 18.... Spent 3 hours on the phone with turbo tax who told me "so sorry but you will loose that tax credit"!! they refused to acknowledge that I was correct. So after 17 years with turbo tax I now filed with HR block with no issues on the adoption carry forward tax credit! 

[smithad63]

Support at Turbotax told me this is a known  BUG in Turbotax for everybody with Adoption carry forward credit.

Turbotax will not let you complete the form, just keeps going round in circles at the Review step asking to complete the Adoption for "year adoption was final" but that field is disabled!

Let's get this fixed Intuit please it's been over a week and we are all still unable to file our taxes and carry forward out adoption credits!

[P9FS]

I am also having the same problem with the Adoption Credit.  I have used TurboTax for the last several years, including the year that the adoption was final, and the first year I was eligible for the carry-over.  This is the second year I am eligible for the carry-over and it is absolutely essential to my filing. 

I have tax liability for 2021.

I have an Adoption Credit carry-over of over $6,900.

No thing has changed regarding this credit from 2020 to 2021.

I had no trouble with this section for 2019 and 2020. 

When alerted as an item that "Needs Review" it prompts me to complete the "Adoption Final" box as "NO," although the adoption was final in 2019.

I am able to select "YES" on form 8839, but "Year Adoption Was Final" remains disabled/ greyed-out.

This error is causing an unsurpassable loop my filing process.

It is absolutely critical to our family that we both file correctly and receive our entitled refund. 

[P9FS]

So I just spent an hour on the phone with Tech Support.  Did the screen-share, had a supervisor, and went over everything in every which way.  The short, short version is that it is confirmed that Adoption Credit is absolutely not working as of the time of this posting.  The agent was great but the solution was out of the hands of the people at Support.  I guess I'll be filing somewhere else this year.

[PaulD CPA]

Here's the solution that worked for me using the download version of TurboTax...
If the child was born 2003 or earlier, omit the birth year, disregard "Enter missing info" and continue on, answering all subsequent questions. 

[PaulD CPA]

As of April 7, 2022 this issue has been resolved and my aforementioned workaround is no longer necessary.

[workingmom4]

This is helpful to know!  I too have been with TT for many years, but not willing to forgo our carryforward credit.  Good to know that HRB is an option!

[workingmom4]

Thank you!  This worked!  For everyone else having this problem, when you get to the attached screen, enter each child adopted in the last 5 years, not just those with expenses/finalization in 2021.  The f

ollowing prompts will ask about what year they were adopted and allow you to apply the carryforward amount to your current taxes.  

[Jhall2025]

Do you think the same work around will work this year? Having the same issue.