Are we still qualified for full adoption credit? A...
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Level 1

Are we still qualified for full adoption credit? Adopted our 2 yr old foster son in Aug 2019 after fostering him since birth. Didn't go after subsidies or medicaid.

 
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Expert Alumni

Are we still qualified for full adoption credit? Adopted our 2 yr old foster son in Aug 2019 after fostering him since birth. Didn't go after subsidies or medicaid.

Yes you may claim the adoption credit in 2019.

 

The 2019 maximum dollar amount per eligible child is $14,080. If your expenses were spread over multiple years, you might be able to spread the credit over multiple tax returns.

 

Included in the tax benefits is a nonrefundable tax credit. This is a dollar-for-dollar reduction in the amount of federal taxes owed (tax liability) for the year. You won't get a refund if the tax credit is more than your total tax owed for the year. However:

  • Any credit in excess of your tax liability may be carried forward for up to five years.
  • There's an exclusion from income for an approved employer-provided adoption assistance program.

To claim the adoption tax credit in TurboTax:

  1. Select search at the top right of your screen,
  2.  Enter adoption credit and select the Jump to link.
  3. Continue answering questions until you're finished.

Regarding the adoption tax credit, keep in mind:

  • If you've adopted the child of your spouse, you can't claim this credit.
  • The credit usually isn't available if you are Married Filing Separately.
  • Keep receipts for all qualified adoption expenses with your tax records.

For more information on the Adoption Credit see IRS Topic No. 607.

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Level 1

Are we still qualified for full adoption credit? Adopted our 2 yr old foster son in Aug 2019 after fostering him since birth. Didn't go after subsidies or medicaid.

Thank you so much for the reply Regina. I am sorry I should have been more specific. I successfully found the section for the adoption credit. We paid about 2500 for lawyer fees and everything but my company reimbursed me for that. This is money is something I can not claim if I read the IRS notes correctly. My more specific question is in regards to the special needs option. Our son was in foster care and when we filed for the adoption we didn't pursue subsidies or medicaid because it would have exponentially slowed us being able to adopt him. Is he a labeled as special needs because he was a foster kid and adopted after he turned 2 ? 

Expert Alumni

Are we still qualified for full adoption credit? Adopted our 2 yr old foster son in Aug 2019 after fostering him since birth. Didn't go after subsidies or medicaid.

In general, the Federal Government has a broad definition of "special needs."  Therefore, each State defines the term for purposes of children's eligibility to receive Federal Adoption Assistance when adopted through the foster care system.

 

Although some children with special needs may have physical or mental disabilities, not all children with special needs require special education. Children may also qualify as having special needs if they are an older youth, from a specific ethnic background, part of a sibling group, or have a medical condition. You may want to follow up with your State agency to determine the eligibility based on your State guidelines.

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